Within the past couple of articles we have introduced QuickBooks Online Banking Feeds. In this segment we continue looking at a few special bank transactions and how to handle them with aplomb.
Transfers
If the transaction is a Transfer between bank accounts, or a Credit Card payment, mark it as a Record Transfer using the third radio button (dot) above the Payee. Otherwise, the account may wind up with two transactions indicating money in and money out instead.
Once you categorize a Transfer on one side, it will Match the Banking Feed on the other side.
You can, of course, create a Transfer manually.
Deposits
When you come to a Deposit, do not just “Add” it here, because it will skip all QBO’s Customer tracking features.
Deposits must MATCH existing transactions with a green box, or you will double your income!
When you see a Deposit on this list, that’s a signal to go to New > Bank Deposit to gather the corresponding individual payments and Sales Receipts into a matching Bank Deposit. As soon as that’s done, QBO notices the new batched dollar amount and Matches the transaction.
If the business is not using Sales Receipts and Invoices for Customer transactions, and instead tracking sales data in a POS or e-Commerce website, it may be OK to pull Deposits straight in using Add, but they won’t see any income in the Money Bars and Income graphs. I usually recommend running a report from the business’s software and creating a Sales Receipt for the daily sales.
PEBCAK! If Deposits get Added instead of Matching them to Sales Receipts and Invoice Payments, income will DOUBLE on your P&L!
Bank Rules
Bank Rules in QuickBooks Online
AliciaP_Bank-feed_03_fig-01
Every time a new type of transaction is processed, QBO creates a Rule, so the next time it sees that same Payee from the bank, it will update this entry automatically.
Instead of relying on QBO’s AI, check out the Bank Rules tab at the top of the screen. Here bookkeepers can create their own customized Rules. This feature is extremely powerful. You can specify criteria by bank account, bank description, and amount. Assign a company Payee, Category, Class, and more.
You can even create Splits by $ amount or percentage.
My favorite part is at the very bottom. For routine expenses, put a check mark in front of Automatically add to my books. QBO will skip the Banking Feed altogether and post the transaction straight to the general ledger. No work for you at all!
Once you have created a set of Rules for your client, export it. You can import it into similar clients’ QBO files, saving you from having to manually set up identical lists for multiple clients.
Job Costing Options
Is your client doing Job Costing or running profitability reports? The following features are part of QBO Plus and Advanced, and are turned on in Account and Settings.
If the Expenses are incurred while serving a Customer, be sure to put the Customer name in that blank on the right.
If your company is passing the cost on to the Customer for reimbursement, check the Billable box. The next time an Invoice is created for that Customer, the Expense will appear in the right column, ready to be added to the Invoice.
If the Markup is set up in the Account and Settings, QBO will even calculate the Markup automatically (you can, of course, fine tune the amount in the Invoice). There is also an option to show or hide the Markup in the invoice.
Putting it all together
Categorizing your transfers and deposits correctly prevents you from sifting through duplicates later, and ensures your income is accurate. Creating and saving your own Bank Rules also saves setup time, and infinite time in the future by eliminating data entry.
To harness QBO’s automation prowess and transform your bookkeeping workflow, please check out my QuickBooks Online Banking training videos including: “The Banking Center and Reconciling Course”. You can also check out my QBOA Tips and Tricks course or join my Mentorship Membership Program here.
In next week's article we will look at Troubleshooting your Banking Feed.