When a reconciliation in QuickBooks Online does not reach a zero difference, the user can choose Add adjustment and finish. Intuit's help explains that QuickBooks then creates an expense transaction for a negative difference, or an income transaction for a positive one, so that the reconciliation closes. For QuickBooks Desktop, Intuit's help states that the adjustment goes into a special expense account called Reconciliation Discrepancies. Either way, an adjustment is not a real expense or income. It is a difference nobody explained. If a Reconciliation Discrepancies line appears in your profit and loss account, the fix is to find each adjustment behind it, trace what it was covering, correct the underlying transactions, and remove the adjustment.
How the account gets a balance
Reconciling an account in QuickBooks Online means agreeing the transactions in QuickBooks to a bank or card statement until the Difference is zero. When it will not reach zero, there are two ways to finish:
- Find the difference: the missing, duplicated or wrongly entered transactions.
- Force it: choose Finish now, then Add adjustment and finish, then Done, as described in Intuit's help. QuickBooks posts the difference so the reconciliation closes.
Intuit describes reconciliation adjustments as a last resort, to be used only when you are sure the amount is small and an error, after reviewing everything for errors. An adjustment closes the reconciliation, but it does not correct the transaction behind it. If that transaction is later entered or corrected, the next reconciliation will be out by the same amount.
Why it matters more than its size suggests
- It hides real errors. An adjustment can hide something specific: a missing deposit, a duplicated payment, a transaction entered in the wrong account, or a bank charge never recorded.
- It distorts the profit and loss account. Adjustments post as expense or income. A run of them overstates or understates profit for the periods concerned, and that profit may already have been used for tax returns.
- It weakens the reconciliations. A reconciliation closed by adjustment does not prove that the books agree with the bank. Anyone relying on it, whether an auditor, a lender or an acquirer, should be told.
Find every adjustment
Intuit's help gives two ways to list previous reconciliation adjustments. Each adjustment carries the memo Reconcile Adjustment.
- Search: open Advanced Search, set it to All Transactions, and filter on a memo containing "Reconcile".
- Report: run Transaction List by Date, in the For my accountant group of standard reports, for the full date range. Customise it to filter the memo for "Reconcile Adjustment". Intuit notes that this report is available in the Essentials, Plus and Advanced editions.
Also run a report of every transaction in the account that received the adjustments, such as Reconciliation Discrepancies, for all dates. This will catch anything posted to it directly, not through a reconciliation.
List each adjustment with its date, bank account, amount and the reconciliation it closed.
Trace what each adjustment was hiding
Work through the adjustments oldest first, account by account, because each one may have carried an error into the next period.
For each adjustment:
- Open the reconciliation it closed in Reconcile > History by account, and the bank statement for the same period.
- Compare the statement with the reconciled transactions. Look for items on the statement that are not in QuickBooks, items in QuickBooks that are not on the statement, and items with different amounts.
- Test the adjustment amount against the usual patterns:
- equal to a single missing or duplicated transaction;
- equal to twice a transaction, which suggests a deposit entered as a payment, or the reverse;
- divisible by 9, which suggests transposed digits;
- equal to a series of small items such as bank charges or interest that were never recorded.
- Check whether a later adjustment reverses it. An adjustment of +350 followed by one of −350 a month later suggests the same timing item was forced twice.
Correct it properly
Once the cause of an adjustment is known:
- Record or correct the real transaction in the right period: the missing deposit, the bank charge, the duplicate removed.
- Delete the adjustment. Intuit's help notes that you can view, edit or delete an adjustment through the same search or report.
- Re-check the reconciliation. If the corrected period has been reconciled, the next reconciliation's beginning balance will now reflect the change. Our post on why a QuickBooks reconciliation stops balancing explains how to follow that through.
What to do with a small residual. Occasionally a very old, small difference cannot be traced after reasonable effort. Leave it as a single, documented adjustment, with a memo explaining the work done and the decision, agreed with the business owner or their accountant. That is a different thing from a balance built up from many unexplained adjustments.
Before you change anything in a closed period
Corrections in an earlier year change profit for a year that may already have been reported or taxed. Before correcting, list the amounts by financial year and agree with the business owner or their tax adviser how changes to filed periods will be handled. Afterwards, set a closing date with a password, so the corrected periods are not edited again.
Stop it coming back
- Do not use Add adjustment and finish routinely. Make it a step that needs approval from the person responsible for the books.
- Reconcile every account monthly, soon after the statement arrives, while differences are small and recent.
- Check the Reconciliation Discrepancies account at every month-end close. It should be zero, or carry only the documented residual.
Where this fits
A Reconciliation Discrepancies balance is worth reviewing alongside the rest of a cleanup. See our QuickBooks cleanup checklist and duplicate transactions after reconnecting a bank feed.
Wissen Solutions traces and clears reconciliation adjustments as part of our QuickBooks Online and offshore accounting services, with a schedule of each adjustment and what it was covering.
Sources (checked 26 October 2026; Intuit updates the interface periodically and labels may differ in your edition)
- Intuit: Enter an adjusting entry for a reconciliation in QuickBooks Online: Finish now, Add adjustment and finish, last resort
- Intuit: Find previous reconciled adjustments in QuickBooks Online: memo "Reconcile Adjustment", Advanced Search, Transaction List by Date
- Intuit: Reconcile an account in QuickBooks Desktop: adjustment posted to a special expense account called Reconciliation Discrepancies
- Intuit: Close the books in QuickBooks Online: closing date and password
- Intuit: Undo your client's reconciliations with QuickBooks Online: History by account