If your bookkeeping is prepared in QuickBooks Online, there are numerous tools you can use to automate the process, reducing errors and time spent on a task that doesn’t make your business more money. So, what are some of these features?
The first is a feature known as “Bank Feeds.” This allows QuickBooks to connect directly with your financial institution, and download transactions every night. It doesn’t matter if it is a checking, saving, or credit card account, you can connect all major companies, as well as most local banks. To connect a business account, go to the Home screen and click “Connect Account” at the right of the screen. Then type the financial institution that hosts the account you would like to connect into the search field. Once you have found your bank, it will ask you for the logins to access the account. Type those in, and answer any challenge questions that follow. It will then list all accounts you have connected to that login. We only want to connect the business accounts, so check those in the box to the left of the account, and select which account on the balance sheet it should be linked to. For example, if you are linking your business’ Bank of America checking account, check it, and in the dropdown to the right, select the account you have been using to track that Bank of America account. If this is a new bookkeeping file, or you have not been tracking the account in QuickBooks, you can create a new account in QuickBooks to track that account’s activity.
Then QuickBooks will automatically download that last 90 days of information into the account. If you have been tracking the account manually in QuickBooks, and you are up to date and didn’t need the transactions going back that far, you can select all of the transactions that came through on the feed and ignore them all. If you need to go back farther then 90 days, you will have to manually download the transaction file directly from the bank, and import it into QuickBooks Online.
Once all of the transactions are in, you will need to tell QuickBooks who the vendor or customer is for each transaction, as well as the account on the P&L or balance sheet where that transaction will go. You can already tell if you are used to manual data entry that this saves time by not having to enter the date or amount each time you enter a transaction, and it happens automatically!
That brings us to the next automatization feature: bank feed rules. Bank feed rules train QuickBooks to look out for certain vendors or amounts, and puts them into the expense category where that transaction needs to go. For example, if you go to 7-Eleven a few times a month, you can train QuickBooks to lookout for the vendor “7-Eleven” mentioned in the description and automatically classify it as automobile expense, and name the vendor 7-Eleven. Rules like this are automatically created as you go through the bank feed and place transactions where they need to go. But what if you need a rule where any transaction from a certain vendor under $50 goes to one expense account, and if it’s over $50 it goes into another. To create these custom rules, click “Transactions” on the left of the screen, then “Banking”. Once in the Banking screen, you will see a dropdown menu in the top right. Select “Manage Rules” from the dropdown menu, and click “New Rule” in the top right. In here, you will create the rule name, the parameters you want QuickBooks to be looking for, where you want those transactions recorded on the P&L or balance sheet. You can even set it up so it splits out a transaction each time between different expense account by either a percentage or flat dollar amount.
Once bank feeds and rules are setup, data entry will be a thing of the past. All that needs to be done is the occasional review to make sure everything is getting put to the right spot.
If you would like us to start a QuickBooks file for you, create the bank feeds and all the rules, we offer a Bookkeeping Setup package where we do all of that plus a 30-minute training meeting. Just reach out to a member of the Halon Tax Team and they will gladly assist you.