Common Practice Pitfalls & How to Fix it: Thinking Categorizing is the same as Reconciling

What’s the difference between categorizing transactions and reconciling your QuickBooks Online account?

Health service providers and business owners often think it’s the same thing, but they’re not—and it’s important to know the difference and to DO both.

Categorizing means assigning each transaction to the correct account (like office supplies, advertising, or income). It helps you track where your money is coming from and going. Business owners often do this and think they are done… but they’re not.

Reconciling means matching your QuickBooks transactions to your actual bank/credit card statements to ensure everything is accurate and nothing is missing or duplicated.

Think of it like this:
Categorizing is sorting your receipts.
Reconciling is making sure none are missing.

When you don’t reconcile your books, errors like duplicate transactions, miscategorized transactions (like a credit card payment incorrectly recorded as an expense), missing income, unrecorded expenses, or incorrect balances can go unnoticed. Reconciliation acts as a final check, comparing what’s in QuickBooks to what actually happened in your bank or credit card account. If something is missing, duplicated, or categorized incorrectly, reconciliation is where those issues often surface.

When you skip reconciling your accounts this can lead to inaccurate financial reports, misleading profit numbers, and potential tax filing mistakes—costing you time, money, and confidence in your business decisions.

Have questions? Need help cleaning up some messy books? Or just want a professional bookkeeper to take this off your plate so you can focus on patients? Schedule a discovery call with me today!