Bank reconciliation is one of the most important accounting tasks in QuickBooks Online. It ensures that your books match your bank or credit card statements. However, mistakes can happen. A transaction might be reconciled incorrectly, a bank statement might be entered wrong, or a late adjustment may require changes to already reconciled data.
When this happens, users often ask: How do I unreconcile in QuickBooks Online?
This guide provides a clear and complete explanation of what unreconciling means, when it should be done, how to unreconcile transactions correctly, and how to avoid future reconciliation errors. Whether you are a small business owner, bookkeeper, or accountant, this article will help you handle unreconciliation safely and accurately.
What Does “Unreconcile” Mean in QuickBooks Online?
Unreconciling in QuickBooks Online means removing the reconciliation status from one or more transactions so they are no longer marked as reconciled. When a transaction is unreconciled, it becomes available again for editing and can be matched or corrected in a future reconciliation.
In QuickBooks Online:
- Reconciled transactions are marked with an “R”
- Cleared but unreconciled transactions show a “C”
- Unreconciled transactions have no letter
Unreconciling does not delete transactions. It only changes their reconciliation status.
Why You Might Need to Unreconcile in QuickBooks Online
Unreconciling is sometimes necessary to maintain accurate financial records. Common reasons include:
- A transaction was reconciled to the wrong month
- The amount on a transaction was incorrect
- A duplicate transaction was reconciled
- A bank statement balance was entered incorrectly
- An adjustment needs to be made to a reconciled transaction
- A transaction was categorized incorrectly
While unreconciling is allowed, it should be done carefully to avoid disrupting past financial reports.
Important Warnings Before Unreconciling Transactions
Before you unreconcile anything, keep the following in mind:
- Unreconciling affects financial reports
- Changes can impact previously closed periods
- It may alter balances on tax reports
- You should document why the change is being made
- Backup your data or note original balances
If your books are reviewed by an accountant or used for tax filings, consult a professional before making changes.
Who Can Unreconcile Transactions in QuickBooks Online?
Only users with sufficient permissions can unreconcile transactions.
Typically required roles:
- Primary Admin
- Company Admin
- Accountant user
Standard or limited users may not have access to reconciliation tools.
How to Unreconcile a Single Transaction in QuickBooks Online
This method is best when only one transaction was reconciled incorrectly.
Step 1: Sign in to QuickBooks Online
Log in with an admin or accountant-level account.
Step 2: Open the Chart of Accounts
From the left navigation menu, select Chart of Accounts.
Step 3: Locate the Bank or Credit Card Account
Find the account where the transaction was reconciled and click View Register.
Step 4: Find the Reconciled Transaction
Scroll or search for the transaction marked with an “R”.
Step 5: Click the Transaction
Select the transaction to open it.
Step 6: Change the Reconciliation Status
In the register, click the “R” until it becomes blank.
Step 7: Save the Changes
Click Save or Save and Close.
The transaction is now unreconciled and will appear in future reconciliations.
How to Unreconcile Multiple Transactions in QuickBooks Online
QuickBooks Online does not provide a one-click option to unreconcile multiple transactions at once. Each transaction must be unreconciled manually.
Recommended approach:
- Unreconcile transactions one at a time
- Work in chronological order
- Compare changes to your bank statement
This ensures accuracy and prevents balance discrepancies.
How to Undo an Entire Bank Reconciliation
If an entire reconciliation was completed incorrectly, QuickBooks Online requires accountant-level access.
Option 1: Use an Accountant User
If you have an accountant user:
- The accountant can undo the entire reconciliation
- This resets all transactions for that period
- Previous reconciliation reports should be reviewed afterward
Option 2: Manual Unreconciliation
If you do not have accountant access:
- Identify all transactions reconciled in that period
- Unreconcile each transaction manually
- Reconcile again with correct balances
This method takes longer but achieves the same result.
How Unreconciling Affects Financial Reports
Unreconciling changes your financial data.
Reports that may be affected include:
- Balance Sheet
- Profit and Loss
- Bank Reconciliation Reports
- Cash Flow Statement
After unreconciling, always rerun reports to verify accuracy.
Best Practices When Unreconciling in QuickBooks Online
- Always note why a transaction was unreconciled
- Keep copies of original bank statements
- Avoid unreconciling closed accounting periods
- Reconcile again immediately after corrections
- Communicate changes with your accountant
These practices help maintain audit trails and financial integrity.
Common Mistakes to Avoid When Unreconciling
- Unreconciling without checking reports
- Editing reconciled transactions unnecessarily
- Forgetting to re-reconcile after changes
- Unreconciling transactions from prior tax years
- Making changes without documentation
Avoiding these mistakes prevents long-term accounting problems.
Troubleshooting Issues When Unreconciling
Issue 1: Cannot Change the “R” Status
Solution:
- Confirm you have admin or accountant access
- Refresh your browser
- Clear cache and cookies
Issue 2: Balance Is Still Off After Unreconciling
Solution:
- Check for additional reconciled transactions
- Verify beginning balance
- Review adjustment entries
Issue 3: Transaction Keeps Reappearing
Solution:
- Ensure it was fully unreconciled
- Confirm it was not matched to another entry
When You Should Not Unreconcile Transactions
Do not unreconcile if:
- The reconciliation is correct
- The period is closed for tax filing
- The issue can be resolved with an adjusting entry
In many cases, adjustments are safer than altering reconciled data.
Alternative to Unreconciling: Adjusting Entries
Sometimes it is better to:
- Create a journal entry
- Record bank fees or interest
- Adjust rounding differences
This maintains reconciliation history while fixing balances.
How to Reconcile Again After Unreconciling
Once corrections are made:
- Go to Reconcile
- Enter correct statement balance and date
- Match transactions carefully
- Ensure the difference is zero
- Finish reconciliation
This restores accurate records.
Frequently Asked Questions (FAQ)
Q1: Can I unreconcile transactions from previous years?
Yes, but it is not recommended without professional guidance.
Q2: Does unreconciling delete transactions?
No. It only removes the reconciliation status.
Q3: Why is unreconciling restricted in QuickBooks Online?
To protect financial integrity and prevent accidental data changes.
Q4: Can I undo a reconciliation myself?
Only single transactions can be undone manually. Full reconciliations require accountant access.
Q5: Will unreconciling affect taxes?
It can, especially if changes impact income or expenses in filed periods.
Q6: Should I back up before unreconciling?
Yes. Always document balances and reports before making changes.
Final Thoughts
Unreconciling in QuickBooks Online is a powerful feature that should be used with caution. While it allows you to correct mistakes and maintain accurate records, improper use can disrupt financial statements and historical data.
By understanding when and how to unreconcile transactions, following best practices, and reconciling again promptly, you can fix errors without compromising your books. Careful documentation and awareness of reporting impacts are key to maintaining clean and reliable accounting records.
Handled correctly, unreconciling becomes a valuable tool for accuracy rather than a source of confusion.
Source: Intuit