How do I undo reconciliations in QuickBooks Online?

Reconciling accounts in QuickBooks Online (QBO) is one of the most important accounting tasks for any business. It ensures your books match your bank and credit card statements, helping you catch errors, prevent fraud, and keep your financial records accurate.

But what happens when a reconciliation is done incorrectly?

Maybe a transaction was missed, duplicated, or categorized wrong. Maybe your bank statement arrived late, or someone reconciled the wrong month. Whatever the reason, undoing a reconciliation in QuickBooks Online is sometimes necessary—and often confusing.

If you’ve ever asked:

• How do I undo reconciliations in QuickBooks Online?
• Can I unreconcile a month without breaking my books?
• What’s the safest way to fix a reconciliation mistake?

You’re in the right place.

This comprehensive guide explains everything you need to know about undoing reconciliations in QuickBooks Online, including step-by-step instructions, common mistakes, best practices, and expert tips to protect your financial data.

 

Table of Contents

 

1. What Is Reconciliation in QuickBooks Online?
2. Why Reconciliations Go Wrong
3. Important Things to Know Before Undoing a Reconciliation
4. Who Can Undo Reconciliations in QuickBooks Online?
5. How to Undo Reconciliation in QuickBooks Online (Step-by-Step)
6. How to Unreconcile Individual Transactions
7. How to Undo Multiple Months of Reconciliations
8. What Happens After You Undo a Reconciliation?
9. Common Reconciliation Mistakes and How to Avoid Them
10. Best Practices for Safe Reconciliation in QuickBooks Online
11. When You Should NOT Undo a Reconciliation
12. How Accountants Handle Reconciliation Errors
13. Frequently Asked Questions (FAQs)
14. Final Thoughts

 

1. What Is Reconciliation in QuickBooks Online?

 

Reconciliation in QuickBooks Online is the process of comparing your bank or credit card statement with the transactions recorded in your QuickBooks account.

When you reconcile, you confirm that:

• Beginning balance matches the bank statement
• All deposits and payments are recorded correctly
• Ending balance matches the bank statement exactly

Once reconciled, QuickBooks marks those transactions with an “R” (Reconciled) status.

 

Why Reconciliation Matters

 

Reconciliation helps you:

• Detect missing or duplicate transactions
• Identify bank errors or unauthorized charges
• Ensure accurate financial statements
• Prepare for tax filing and audits
• Maintain clean, reliable books

However, if reconciliation is done incorrectly, it can create serious accounting problems—which is why knowing how to undo it properly is critical.

 

2. Why Reconciliations Go Wrong

 

Even experienced bookkeepers make reconciliation mistakes. Some of the most common reasons include:

 

1. Incorrect Beginning Balance

 

If the beginning balance doesn’t match your bank statement, the entire reconciliation will be off.

 

2. Missing Transactions

Transactions may be:

• Entered in the wrong date range
• Deleted accidentally
• Not downloaded from the bank

 

3. Duplicate Transactions

Bank feeds sometimes create duplicates if transactions are manually entered and then downloaded.

 

4. Wrong Account Selection

Reconciling the wrong bank or credit card account is a surprisingly common mistake.

 

5. Late Bank Adjustments

Fees, interest, or adjustments posted after reconciliation can throw off balances.

 

6. Multiple Users Making Changes

In QuickBooks Online, multiple users can edit transactions—even after reconciliation—leading to discrepancies.

 

3. Important Things to Know Before Undoing a Reconciliation

 

Undoing reconciliations is powerful—but risky if done incorrectly.

Before you proceed, keep these points in mind:

• Undoing reconciliations changes historical financial data
• Reports like Balance Sheet and Profit & Loss may change
• Taxes, payroll, and financial statements could be affected
• You should always identify the exact problem first

Pro Tip: If you’re unsure, make a backup of reports (PDF or Excel) before undoing anything.

 

4. Who Can Undo Reconciliations in QuickBooks Online?

 

Not every QuickBooks user can undo reconciliations.

User Permissions Required

To undo reconciliations, you must be:

• Primary Admin
• Company Admin
• Accountant user

If you don’t see reconciliation options, check your user role or ask the admin for access.

 

5. How to Undo Reconciliation in QuickBooks Online (Step-by-Step)

 

QuickBooks Online does not have a single “Undo Reconciliation” button like QuickBooks Desktop. Instead, reconciliations are undone by manually unreconciling transactions.

 

Step 1: Sign in to QuickBooks Online

Log in as an Admin or Accountant user.

 

Step 2: Go to the Chart of Accounts

1. Click Settings ⚙️
2. Select Chart of Accounts

 

Step 3: Locate the Reconciled Account

Find the bank or credit card account that was reconciled incorrectly.

Click View Register (or Account History).

 

Step 4: Identify Reconciled Transactions

Look for transactions marked with:

• R = Reconciled
• C = Cleared

You’ll need to change these statuses.

 

Step 5: Unreconcile Transactions

1. Click on the transaction
2. In the “Check” or “Deposit” column, click the R
3. Keep clicking until the status becomes blank
4. Click Save

Repeat this process for each transaction you want to unreconcile.

 

6. How to Unreconcile Individual Transactions

 

If only one or two transactions caused the problem, you don’t need to undo the entire reconciliation.

 

Best Use Case

• One duplicate charge
• One missing deposit
• One incorrect amount

 

Steps

1. Go to Chart of Accounts
2. Open the account register
3. Find the transaction
4. Change status from R → blank
5. Save

After fixing the transaction, you can reconcile again correctly.

 

7. How to Undo Multiple Months of Reconciliations

Undoing multiple reconciliations requires working backward, starting with the most recent month.

Important Rule: You cannot undo an earlier reconciliation without undoing the ones after it.

Example: If you want to undo January:

• Undo February first
• Then undo January

 

Best Practice

• Work one month at a time
• Keep notes of changes
• Reconcile again after corrections

 

8. What Happens After You Undo a Reconciliation?

Once transactions are unreconciled:

• QuickBooks removes them from reconciliation history
• Account balances may change
• Reports update automatically
• The reconciliation page resets

You’ll need to reconcile again to ensure balances match your bank statement.

 

9. Common Reconciliation Mistakes and How to Avoid Them

 

Mistake 1: Forcing Reconciliation to Balance

Never add fake adjustments just to make it balance.

 

Mistake 2: Editing Reconciled Transactions

Editing reconciled entries without understanding the impact can break your books.

 

Mistake 3: Skipping Reconciliations

Skipping months makes future reconciliations harder.

 

Mistake 4: Not Reviewing Bank Statements

Always reconcile using the actual bank statement—not estimates.

 

10. Best Practices for Safe Reconciliation in QuickBooks Online

 

• Reconcile monthly
• Lock periods after closing
• Limit user permissions
• Use bank feeds carefully
• Review reconciliation reports
• Keep documentation

 

11. When You Should NOT Undo a Reconciliation

 

Avoid undoing reconciliations if:

• The issue is only a timing difference
• Reports are already finalized
• Taxes have been filed
• You’re unsure of the impact

In these cases, adjusting entries may be safer.

 

12. How Accountants Handle Reconciliation Errors

 

Professional accountants often:

• Identify the root cause
• Use adjusting journal entries
• Preserve audit trails
• Reconcile in controlled steps

If the issue spans many months, hiring a QuickBooks ProAdvisor is often the best solution.

 

13. Frequently Asked Questions (FAQs)

 

Can I undo a reconciliation in QuickBooks Online?

Yes, but only by manually unreconciling transactions.

 

Is there a one-click undo button?

No. QuickBooks Online requires manual changes.

 

Will undoing reconciliation affect reports?

Yes. Balance Sheet, P&L, and cash flow reports may change.

 

Can I undo reconciliation from prior years?

Yes, but it’s risky and should be done carefully.

 

How long does it take to undo reconciliation?

From a few minutes to several hours, depending on volume.

 

14. Final Thoughts

 

Undoing reconciliations in QuickBooks Online isn’t difficult—but it must be done carefully. One wrong change can affect months or even years of financial data.

By understanding how reconciliation works, identifying errors early, and following the correct steps, you can confidently fix mistakes without damaging your books.

If you’re ever unsure, don’t hesitate to consult a professional. Clean, accurate books are worth the effort.

Source: Intuit