Every cloud accounting application is centered around the bank feeds. You’re almost not meant to record a transaction in your bank account until after it has cleared. The US is one of the few countries where we still write checks. It’s amazing how we are advanced in so many ways, while in others, we are surprisingly far behind. I no longer write checks. Nor do I print them. Everything is paid electronically. It’s more secure, more efficient, and it costs less.
In short, the banking area within every could accounting application is where most of the on going work get’s done. Once you have your systems set up, many of your bookkeeping clients will be managed substantially by keeping up with the bank feeds, and then running and analyzing reports, to ensure things are classified correctly, and then make important decisions based on the information.
The generic process is easy to follow. You set up your bank feeds. Since you’re in the cloud, it’s often as easy as logging in to your bank account from within the accounting application. Once the login is confirmed, QuickBooks Online will download transactions going back as far as 6 months. This depends on the bank. If you already have history because (eg) you migrated data, then you’ll want to be careful on your first download. Only add in transactions, that aren’t already in there. Then delete what remains.
After your first download, you’ll only have to deal with new transactions (since the last download).
Important! If you use apps that sync to QuickBooks Online, and those apps push transactions into the banking, then you must sync those apps, before you match your transactions from the bank feed. Otherwise you run the risk of creating duplicates. Always sync your other apps, before matching. It’s ok if the transactions have already downloaded from the bank. Just don’t match or accept them until after all other apps have had a chance to sync up.
As time goes on, you will find that it takes less time to match things up. Most of us are creatures of habit, and we tend to spend money at the same places. QuickBooks Online will learn the associations between payees, and accounts. You can also set rules, to help speed up the matching process.
In some cases, you may want to create rules. This will speed things along, especially when the same transactions get coded the same way every time. There are also cases where you may not want to create a rule. Staples, or any office supply store is a great example of where you may NOT want to create a rule. The reason for not creating a rule is that in some cases it could be several different accounts that it gets coded to. At Staples, it might be office supplies, but it also might be a printer, or a computer. It could even be food. In a case like this, you want to leave the decision open at the time of download, so that it can be determined where it goes, or if it needs to be split.
Once you’ve reconciled all of the downloaded transactions, your Bank balance should match your QuickBooks balance. If it doesn’t, it means you have uncleared items in QuickBooks. In the video I show you show to run a report showing all uncleared transactions for an account. Then I discuss when, and how you may want to clean this up.