Setting Up Your QuickBooks Online® Company – Part Fourteen

Bank Feed Troubleshooting

In the last article we looked at how to clear out the Banking Feed and match deposits. In this article we want to look at some of the common mistakes QuickBooks Users make, and how they can be corrected.  Sometimes the 'match-n-mismatch' errors associated with Banking Feeds result from human error, sometimes from rule errors (in how bank rules have been set-up or allowed to populate) and sometimes in the actual technology of banking feeds itself although that is getting few and further between.

Overstated Income

This is the first of three “PEBCAK’s" you and your staff will look for to when it comes to troubleshooting a client file.

There are two symptoms: The company’s reports show that the income is WAY higher than it’s supposed to be. Another red flag is a long list of old transactions in the Bank Deposit (Undeposited Funds) screen.

This happens because the business owner is clicking Add for the Deposits in the Banking Feed, then typing in the customer and service account, instead of Matching them to existing Customer Payments and Sales Receipts.

An easy way to find these duplicated Deposits is to run a Profit & Loss Statement, then drill down into the dollar amount for your Income category. Look for the transaction type “Deposit.” That shows the money was coded directly to the income account instead of through a sales form.

To fix a duplicated Deposit, click on it to Edit. Check off the transactions in the top half of the window that should have made up that total. Then click the Trash Can at the far right of the lower section with the accidental entry to remove it.

Incorrect Payee

Another fine PEBCAK! Our second huge, inconvenient troubleshooting issue is that some banks use generic bank descriptions like “Check.” This causes Banking to autofill the Payee and Account with the most recent previous transaction. Don’t get fooled when you see an expense with the wrong Payee, or the wrong Account assigned.

Don’t panic! It’s up to you, the business owner, or your staff to determine if these are correct or not. It’s important to click on and edit most of the transactions until the patterns become familiar.

The total Deposit remains the same, so it’s fine to do this even if the transaction has already been reconciled.

One Vendor, two types of Expenses

Now we are to PEBCAK! # 3... another troublesome scenario being when a Payee might have two different types of transactions. For example, Intuit is my Payee for my QBO software subscription. Intuit is also the Vendor for my Merchant Services Fees account. I have to keep an eye on each transaction to make certain that they both get categorized appropriately.

This is where the custom Bank Rules come into play. I created two Rules, based on the Bank Text AND the amount of the transaction.

In each Rule, select “all” of these conditions so that both the Bank Text and the dollar amount are taken into consideration.

Intuit transactions under $15 are categorized as Merchant

Services. Intuit transactions over $15 are Office Supplies and Software (IRL, I use a separate Expense account for Software Subscriptions).

That way the Rules sort the two smartly, and I just have to keep an eye out for anomalies.

My Best Banking Feed Advice to Bookkeepers is:

  1. Match all Income: Enter company income using Sales Receipts and Invoice/Receive Payment to Undeposited Funds, then use Bank Deposit the money into the bank.
  2. Manually create all Customer-related or Product & Services purchases: Create expense transactions that get assigned to Customers, Classes, or Product purchases. Let those Match, too!
  3. Use Transfers: Any time money is moving between bank accounts and credit cards, use Transfer so that one transaction appears in both accounts.
  4. Pull in other Expenses: Go ahead and suck in overhead Expenses, unless they need to be attributed to as above.
  5. Create Rules: Automate as many transactions as possible to reduce your firm’s data entry time.

Conclusion

I know that I’m a Banking Feeds geek, but I truly love how the automation has transformed my bookkeeping from data entry to…anything but! Now that I’m not categorizing utility bills, I have time for more clients. Now that I’m not spending my time looking up receipts, I can instead look for spending patterns and make recommendation.

If you would also like to ditch the grudge work and perform more tasks you love, embrace the artificial intelligence and tame your Banking. And, if you would like to see these troubleshooting tips in action then consider checking out my 2-hour Deep Dive into Banking Feeds.

In our next article we will start an entirely new segment of our QuickBooks Online Basics Series here at Insightful Accountant and we will dive right into 'managing the Customer Center'.