How to Do Bank Reconciliation with Zoho


Welcome to the Fit Small Business Bank
Reconciliation course. In this video we’re going to show you how to reconcile
a bank account using Zoho books. To follow along with me, login to your Zoho
account now or click the link below this video for a free trial of Zoho books.
Let’s get started. From the Zoho books dashboard, go ahead and click on banking
on the left hand menu. And then click the add bank or credit card button up here at
the top in red. There are three ways to connect your bank account to Zoho books.
From the dropdown you can simply select your bank, or type the name of your bank
in this field. If you see your bank listed here in this section with an icon
you can simply click on that button to select it. Or your third option is to
enter the account information manually. In the next screen you want to go ahead
and enter your online ID and pass code. Once you have done so you can go ahead
and click the continue button. Once Zoho books has connected with your bank
account, you will see a list of all of the accounts that you have at the
financial institution listed in this section here. Put a check mark next to
each account that you’d like to go ahead and connect to Zoho books. Download
transaction history: from the drop-down calendar here you want to select the
date that we’d like to go back and download transactions for. Please note
that you can go back 90 days in Zoho books. If you need to go back further
than that, you will need to import the bank statements for anything older than
90 days. For example, let’s assume that it’s April 16th and your tax
professional has told you if you bring in a shoe box next year, the fee will be
doubled. So you vow to start using Zoho books
immediately. In order to get all of your banking transactions that have occurred
into Zoho books since January 1st, you can import your January bank
statement, and then use February 1st as the date you will download transaction
history. In the currency field you want to go ahead and select the appropriate currency for the bank account you are setting up.
One of the benefits of using Zoho books is you can easily track both
foreign bank and credit card accounts. Once you’ve made that selection you can
go ahead and click the continue button. Once you have successfully set up the
bank feed, your bank accounts will be listed in the banking overview section
as you can see here. In the account details column, you will see the name of
your bank account, type of bank account, the last four digits of the bank account
number which is not shown here for security reasons, and you will also see a
date here. This date represents the date that the latest transactions were
downloaded from your bank. In the uncategorized column, you will find the
number of transactions that you need to review and categorize to the appropriate
income or expense account. Please note if you have already entered some of your
banking transactions in Zoho books then you will also have a column that says
recognized. This means that Zoho has matched a transaction that you entered
manually with one downloaded from your bank. The pending checks column reflects
checks that you have created in Zoho books but you have not printed. The
balance amount in bank column represents the balance in the bank account as of
the last update. And the final column here amount in Zoho books: this is the
current balance in the bank account per Zoho books. These are also basically
another way to say this is transactions that have been categorized to income and
expense accounts. Please note that the goal of the reconciliation process is
for the amount in the bank account, this column, to equal the amount in Zoho books, this column. Let’s go ahead and walk through the steps required to assign an
account to the uncategorized transactions. So you want to go ahead and
click on the uncategorized column for the bank account that you’d
like to work with. For this account we’ve just got one uncategorized transaction
but typically you’ll probably have pages of transactions so you want to scroll
down to the very bottom, and scroll over to the oldest transactions and work from
there. So go ahead and click on the transaction. And so what happens is a
window opens up here over to the right which will allow us to complete the
fields of information that we need to categorize this transaction. So the first
field here is category from the drop-down you want to select the type of
transaction that this represents. The options that you have to choose from are
listed here: expense, vendor advance, vendor payment, transfer to another
account, sales return, card payment, owner drawings, credit note refund, and payment refund. Expense account: from the drop-down select the appropriate account.
If the account is not set up you can set it up by clicking this + new account
button here at the very bottom. The vendor field is optional. From the
drop-down you can select the appropriate vendor. If the vendor is not set up you
can click the + new vendor button and set the vendor up in this screen. As you
can see here the amount field has already been populated and there’s no
ability to edit that information so that’s the amount that downloaded
directly from the bank. The reference field is optional. In this field you can
enter any additional information about this transaction such as a purchase
order number. The description field will automatically populate with the
description from the bank. You can change the description or delete
it altogether. Attach receipt: Zoho books allows you to attach receipts
directly to the transactions they are associated with.
So you have the option of attaching a receipt from your desktop,
from the cloud, or attach it from other documents. Customer: if the transaction is
related to a customer, you can select the customer from the drop-down. If the
customer has not been set up you can click the + new customer option here
and set the customer up directly in this screen. Once you have categorized the
transactions that have been downloaded, you can go ahead and save your work here.
And once you have categorized all the transactions that were downloaded, you’ll
no longer see transactions in the uncategorized column, that message has gone away.
And you will also notice that the amount in bank matches the amount in
Zoho books column. As mentioned previously you can reconcile as often as
you like. Since any new transactions will download daily. When you receive your
bank statement at the end of the month, it will be a breeze to reconcile if you
have already categorized your banking transactions throughout the month. Let’s
walk through the steps you should take to complete the monthly bank
reconciliation. From the banking overview screen you want to go ahead and click on
the account that you would like to reconcile. From this screen in the upper
right hand corner you want to click on this gear icon and select reconciliation
history. And as you can see from this screen we have not reconciled this
account yet. If we had previously reconciled this account, we would have
information here listing the reconciliation information as you can
see, so we’ll go ahead and click reconcile account. In this screen you
want to go ahead and enter information directly from your bank statement. So
here we’re going to enter the beginning and ending statement periods in each of
these fields. Please note if you are reconciling more than one month, then be
sure to use the beginning date of the first month and the ending date of the last month. So in this example we are
reconciling three months worth of transactions so we’ve gotten a little
bit behind. So we’re going to reconcile the month of April, the month of May, and
the month of June. Because we’re reconciling those three months the
beginning statement date will represent April first, the first day of the first
month we’re reconciling. And then the ending date will represent the last day
of the last month we’re reconciling. In this example it would be June. So you
want to enter that information in this field. And then you want to enter the
ending balance from the bank statement that’s listed in this field here, okay? So
that goes in the closing balance field. Once you have completed all of those
fields then you can go ahead and click the start reconciliation button. In the next
screen you will see a list of all transactions that were downloaded and
categorized in Zoho books. So the date column here in this screen represents
the date of the transaction. Transaction details: this is the account that you
categorized the transactions to. The type column represents the type of account
that you selected for transaction details. Along with the name of the
vendor if you chose a vendor for the transaction. The deposits column
represents all of the deposits that were made to the account, and the withdrawals
column represents all of the withdrawals that were made to the account. The clear
column represents items that were downloaded from the bank which means
that they have essentially cleared the bank. If you do not have a check mark in
this column next to a transaction, then more than likely it was probably
manually entered and you need to make sure to put a check mark there so that
you can balance. If we scroll down to the very bottom, we’ve got a closing balance
here as of June 30th of $2,038.35 here. So this is the ending balance that you entered earlier from your bank statement.
The cleared amount here $2,038.35 is the total
amount of all transactions that were downloaded to Zoho books from your bank,
or manually entered. So it’s basically the total of everything up above that
has a check mark. The difference columns represents the difference between the
closing balance and the cleared amount. Our goal is to get to a difference of
zero as we have here. Please note if you do not have a zero balance here I want
you to refer to our tips for reconciling bank accounts later on in this section. We
have a link here that says add transaction. If you discover that you
have transactions that are missing, then you can go ahead and click add
transaction and this will take you to the Zoho books where you can actually
add those missing transactions. And then you can return here to complete your
reconciliation. And again as we discussed previously you can attach a copy of your
bank statement, clear cheques, receipts, or other supporting documents here for
future reference. At the very bottom of the screen you will see three buttons:
save and reconcile later, reconcile, and cancel. The save and reconcile later
button is going to become your friend. If for some reason you are working through
a reconciliation and you’re out of balance and can’t figure it out,
or you get interrupted and you’ve got to move on to something else, you can save
and reconcile later which means that it will save your work so that you can come
back and pick up where you left off. Reconcile: you only want to click this
button if your difference here is zero. If your balance is not zero be sure to
refer to the tips that I’ve shared with you on reconciling bank accounts.
Please note that Zoho books will not allow you to proceed with
a reconciliation until your balance is zero. And for the cancel button, click
this button if you don’t want to save your work and your plan is to start over
from scratch. Since we are in balance we’re going to go ahead and reconcile
this account. Once you do that you will see that we are back at the
reconciliation history screen now. And so this is a reconciliation that we just
completed and the status is reconciled. So please note that if you decided to
save and reconcile later, the status will show in progress until you complete the
reconciliation. Please also note that if you accidentally click the reconcile
button and you didn’t mean to, you can undo a reconciliation by hovering in the
row here and then you will see a picture of a trashcan. If you hover over that it
says undo reconciliation. Now let’s talk about some tips for reconciling bank
accounts. If you’re having trouble getting to a zero difference between
what’s in Zoho books versus what your bank statement has, try some of these
troubleshooting tips. Tip number one: make sure that each transaction that’s listed
has a check mark in the far right column marked clear. So we talked about that
previously. If a transaction does not have a check mark, it is not included in
the cleared amount total. Tip number two: the difference could be one transaction.
So look for the exact dollar amount that you are off. For example if your
difference is $42, then look at your bank statement to see if there is
one transaction for this amount. If not, check the transactions recorded in Zoho
books. Tip number three: make sure that every transaction on your bank statement
has been recorded in Zoho books. Any transactions that are listed on your
bank statement but do not appear in Soho books will
cause you to be out of balance and vice versa. You will need to add the
transaction to Zoho books, and then proceed with the reconciliation. Tip
number four: unless you don’t have a lot of transactions, I would not recommend
reconciling more than one month at a time. The more transactions you have to
reconcile, the higher the chances are that you will have a difference. Locating
an out of balance will be that much harder to find if you have to look
through two or three months worth of transactions as opposed to just one
month. And finally tip number five: if you have a difference greater than a dollar,
and you have not been successful with figuring things out, I suggest that you
start the reconciliation over. You can do this at any time by clicking that cancel
button as we discussed previously. By now you should have a better understanding
of how reconciling your bank accounts can help you to stay on top of the cash
coming in and going out of your business, and make tax time a breeze.
Remember to keep the following tips in mind to make this process as smooth as
possible. First, be sure to organize and store
receipts in the cloud using a receipt scanner app. Click the link below to
access our guide on best receipt scanner apps. Second, invest in an accounting
software like Zoho books so that you can connect your bank accounts and
automatically download and categorize transactions as often as you like. Third,
compare receipts to the bank statements to ensure only transactions that you
have authorised are being deducted from your bank account. That wraps up our
video tutorial on how to reconcile a bank account using Zoho books.

9 thoughts on “How to Do Bank Reconciliation with Zoho

  1. Finally, someone in English! I like ZohoBooks, and espcially Zoho Exprense !!!! Issue: I have Main Business account. Need to fill in 3-6 months. The exact months are unclear. I need to fill in for 2017. B) I use Zoho Expense constantly. I DO NOT SEE where it is integrating w. Zoho Books. Wonder why? DO NOT want to return to QBO. Am NOT a CPA. Help? Zoho hard to talk to.Appreciate!

  2. Nice video, like it . @t is working on to migrate QuickBooks to ZOHOBooks migration, we completed more than 3 years data migration from QuickBooks to ZOHO Books. Visit us @t or @t OR see our services: @t

  3. Good introductory video. It would be beneficial if you created a second more detailed video to show how to reconcile an out of balance account.

  4. I was seeking for a video which can teach clearly how to reconcile. She simply said if difference is zero we are good to go. Dear mam we know that, we want to know if difference exist then how to reconcile , what to check and uncheck.
    If anybody can tellexact method plz share.

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