FreshBooks approaches bank reconciliation differently from QuickBooks — its focus is on matching imported bank transactions to invoices and expenses you have already recorded, rather than a traditional balance-matching reconciliation. Here is how to keep your FreshBooks records clean and accurate each month.
How FreshBooks Handles Bank Transactions
On FreshBooks Plus and above, when you connect your business bank account, transactions import automatically into the banking section. These are “unreviewed” transactions that you need to:
- Match to existing invoices or expenses already in FreshBooks, or
- Create new expenses or income records from the imported transaction
Unlike QuickBooks, FreshBooks does not offer a traditional statement-balance reconciliation where you enter an ending balance and check off transactions. Instead, the reconciliation discipline comes from reviewing and categorizing every imported bank transaction against your actual bank statement.
Monthly Bank Review: Step by Step
- Go to Accounting → Bank Accounts in FreshBooks
- Select your connected business bank account
- Review the transaction feed for the month — any transaction marked as “unreviewed” needs attention
- For incoming payments: match them to the corresponding invoice you issued. Click the transaction → Find matching invoice → Confirm. This marks the invoice as paid.
- For outgoing payments: match to an existing expense if you already entered it, or create a new expense category directly from the transaction
- For bank fees: categorize as “Interest and bank charges” (T2125 line 8710)
- When all transactions are reviewed, compare your FreshBooks running balance to your bank statement balance for the period — they should match
Troubleshooting Common Issues
Transaction in bank but not in FreshBooks
A payment came in but there is no matching invoice — this can happen with informal payments or deposits you forgot to invoice. Create a new income entry manually from the banking section to capture the income.
Invoice marked paid but no matching bank deposit
A client paid by cheque that you recorded in FreshBooks but the cheque has not cleared. In FreshBooks, this appears as a payment recorded but not yet in the bank feed. It will resolve when the deposit clears and imports.
Exchange rate differences (USD payments)
If a US client paid you USD and your bank shows a different CAD amount than FreshBooks expected (due to the exchange rate used), adjust the payment amount in FreshBooks to match what actually cleared. Record the exchange rate used for the Bank of Canada rate on the transaction date.
How FreshBooks Reconciliation Differs from QuickBooks
| Aspect | FreshBooks | QuickBooks Online |
|---|---|---|
| Method | Transaction review and matching | Statement balance reconciliation |
| Starting point | Imported bank transactions | QuickBooks transaction list vs statement |
| Audit output | Reviewed transactions in account | Formal reconciliation report |
| Difficulty for non-accountants | Easier (more intuitive) | More traditional but more complex |
Frequently Asked Questions
Does FreshBooks generate a reconciliation report I can give my accountant?
FreshBooks generates a bank register report showing all transactions for a period, which serves this purpose. Go to Reports → Accounting Reports → General Ledger (or a similar report for your account type). Your accountant can review this alongside your bank statements to verify accuracy. FreshBooks does not produce a traditional bank reconciliation statement in the same format as QuickBooks.
What if my bank is not listed in FreshBooks’ bank connection options?
FreshBooks uses Plaid (a third-party financial data aggregator) to connect bank accounts. Not all Canadian banks and credit unions are supported. If your bank is not available, you can import transactions manually by downloading a CSV from your bank’s portal and uploading it to FreshBooks. Go to Accounting → Bank Accounts → Import.
How do I handle Interac e-Transfer receipts in FreshBooks?
When a client pays by Interac e-Transfer, it appears as a deposit in your bank feed. Match it to the corresponding invoice in FreshBooks (client name and amount should correspond). If the amount does not match exactly (e.g., client paid the HST portion separately), adjust accordingly. Interac e-Transfers do not include automatic invoice references — manual matching is required.