The hallmark of QBO that gives it such great return on investment is its Banking Feed. You will save several hours a week of clerical work by using Banking.
The Banking Feed connects to your bank websites for your checking and savings accounts, and credit cards. It becomes a central clearinghouse to see what transactions have cleared the bank that day.
By using it as your focal point, you’ll know what work you need to do in your QuickBooks to stay up to date. Any transactions you see here need to be either Matched to existing transactions, or Added to your books.
Your goal is to see zero transactions under each account.
While it still needs maintenance to import cleanly, the Banking Feed automates the time-consuming task of manually entering every single debit card and credit card charge.
It also helps you discover transactions you missed, or ones you created that never hit the bank.
Mastering the Banking Feed is essential to your success as a bookkeeper. Please join me in my webinar sponsored by Divvy, "Banking Feed in QBO" on August 27, where I’ll demonstrate all these techniques, and give you all my favorite tips and tricks! You can register here.
Setting up the Banking Feed
To use Banking, you’ll map your bank and credit card accounts to QBO either by Direct Connect, which updates with the click of a button, or Web Connect, to upload downloads from banks that are still old-school.
To get set up, click on the Link Account button, then choose your bank. Log in with your bank’s username and password. Map your business bank accounts to your accounts in QBO. Skip all your personal accounts.
Choose how far back you would like to import. If you’re converting an existing file, you may just need the last month. If you’re starting a new file, you may import a year or more.
If you need to go back further, go to your bank’s website and download a .qbo or .csv export of the missing transactions. Use the drop-down arrow on the Link Account button and choose Upload from File.
Repeat this step for all your bank accounts and credit cards.
WATCH OUT! On new QBO files, the bank connection will create an already-reconciled Opening Balance Equity entry. Sometimes this is helpful, but most times it needs to be edited or deleted. Find it in the Bank Register to adjust it or remove it.
Clearing Out the Banking Feed
How the Artificial Intelligence Works
There’s a 6-step process behind the scenes that determines how QBO categorizes transactions in the Banking Center:
- Is there already an existing match for an unreconciled transaction for that dollar amount? Suggest it as a Match.
- Is there an open invoice or bill for that dollar amount? Suggest this transaction to close it.
- Does it meet the criterion in any of your Rules? Apply the Rule.
- Did you code a similar transaction in the past? Repeat it now.
- Has any other company categorized a similar Bank Detail? The AI suggests out of its database.
- If none of these steps trigger, the transaction is left as Uncategorized.
Finding Matches
QBO first looks for Unreconciled Transactions to match. It will even try to match to open Invoices and Bills! It first finds the dollar amount, and then it looks to the date.
- Any transactions that you have already entered manually into your QBO will be marked MATCH. This green MATCH box is your holy grail, verifying you processed your transactions correctly.
- If it finds more than one potential match, the green box turns white. Click on it and choose the proper matching transaction. The date is your best bet for deciding which transaction is correct.
- For transactions that don’t match at all, you will need to edit and Add them, or create them manually, depending on what type of entry it is. Use the instructions throughout this book to manually create these income and expense transactions.
WATCH OUT! The Artificial Intelligence (AI) learns as you go, and will automatically populate transactions for you. But never trust the automatic data.
The problem is that some banks only have generic bank descriptions. It will repeat the most recent Payee and Category throughout your Banking Feed, even if it’s wrong.
Don’t get fooled! You are in control. Just click on the transaction and change it to what it’s supposed to be.
Simple Expenses
Transactions for overhead expenses can usually be Added through this Banking interface. Here’s how:
Click on one to edit it.
If it’s a Vendor you will use frequently, enter them on the Payee line. If you don’t enter a Vendor name, the only way you will find this transaction will be by finding it on a report. It won’t show anywhere in the Vendor Center.
If it’s a one-off expense or a Payee you don’t want to accumulate in your Vendor list (like restaurants or gas stations), you have two choices:
- Create a “Miscellaneous” Vendor for one-off purchases
- Create a generic Payee like “Restaurant” or “Gas Station” that you can use for all similar suppliers.
Next, enter the Expense category. Be sure to choose the right one, and be very sure not to leave it as Uncategorized Expense! When done, select Add.
Deposits
Transactions that have to do with Customers, including Deposits and purchases of Products and Services, cannot be simply pulled in – you will have to make those Invoices and purchases manually, then Match them in this Bank Feed.
Conclusion
Mastering the Banking Feed is essential to your success as a bookkeeper. Please join me in my webinar sponsored by Divvy, "Banking Feed in QBO" on August 27, where I’ll demonstrate all these techniques, and give you all my favorite tips and tricks! You can register here.