How to Change the Category of a Reconciled Transaction in QuickBooks Online

It’s not uncommon for someone to realize they categorized a reconciled transaction incorrectly.

Don’t worry, this is not a big deal, and it’s an easy fix. Let me show you what to do.

I’ll also show you that it’s okay to split a reconciled transaction and why.

Quick Instructions:

  1. Open the transaction
  2. Change the Category/Account
  3. Click Save and close
  4. Click Yes on the pop-up

Keep reading for a complete walkthrough with screenshots:

Changing a Reconciled Transactions Category

I have a checking account that’s reconciled through 5/15/2024.

Reconciled through date in the bank register in QBO

There’s a reconciled deposit in the category of Uncategorized income. That’s not right. I need to fix it. 

To change the category, click the transaction, then click Edit to open the transaction.

Editing a transaction from the Bank Register in QBO

From here, click the drop-down in the ACCOUNT column and select a different category.

Updating the category of a reconciled deposit in QBO

When you’re ready, click Save and close in the lower right corner.

A pop-up appears warning you that “The transaction you are editing has been reconciled. Saving your changes could put you out of balance…”

Warning you get when saving an editing transaction that's been reconciled.

This sounds scary, but it’s nothing to worry about. The dollar amount of the transaction has not changed, so this will not put you out of balance. Click Yes to continue.

Checking Your Reconciliation

From the Bank Register, click the Reconcile button in the upper right corner.

Reconcile button in the Bank Register

The beginning balance hasn’t changed. There are no error messages. Everything’s good.

Checking that there are no reconciliation errors after updating a reconciled transaction in QBO

Splitting a Reconciled Transaction

What if you realize a reconciled expense needs to be split? This is not a problem either.

I have an expense that’s categorized as Bank Charges, but this is incorrect. 

Editing an incorrectly categorized reconciled expense in QBO

For this transaction, I’m changing the Category from Bank Charges to Rent or Lease and adding a new line for Utilities

Here’s why this isn’t a big deal: The original total for the transaction is $900. I’ve split this transaction with $800 going to Rent or Lease and $100 going to Utilities, which still adds up to $900.

Splitting a reconciled transaction in QBO

When you save the transaction, you’ll get the warning pop-up mentioned above. Again, it’s not a problem, and you can click Yes because the transaction total hasn’t changed.

When You Know You Have a Problem

If you change the total of a reconciled transaction, your beginning balance will be off. You’ll know because you’ll see an error message the next time you reconcile that account.

Beginning balance error when reconciling QBO

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This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Gentle Frog, LLC does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Gentle Frog, LLC does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers and viewers should verify statements before relying on them.

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