In this tutorial, you’ll learn how to enter bank transactions manually in QuickBooks Online. We provide links to our tutorials that cover each of the common bank transactions. We also show you how to enter bank transactions directly in the check register of QuickBooks Online, although this is generally not the best way to add transactions.
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This tutorial is one in our series of Free QuickBooks Tutorials. The video below and the step-by-step illustrated instructions that follow present the same information. The video is from a slightly older version of QuickBooks Online. While the process of entering transactions in the check register in QuickBooks Online is essentially unchanged, the layout of the screens is slightly different. I encourage you to read the section on why you should not input transactions directly in the check register before viewing the video.
Why You Should Not Enter Bank Transactions Directly in the Check Register
One of the strengths of QuickBooks Online is the use of easy-to-understand screens for inputting transactions. These input screens provide fields for all the information QuickBooks needs to account for the transactions properly and provide in-depth reporting. The check register does not provide all the necessary fields. For instance, the check register does not provide fields for:
- Items: The check register does not allow you to assign transactions to Items in your products and services list. The register only allows assigning amounts directly to an account, sometimes called a category in QuickBooks Online. Any purchase or sale of inventory must be assigned to the correct Inventory Item for QuickBooks Online to track your inventory quantity and cost. Any sale of services should be assigned to the correct Service Item so that QuickBooks Online can provide a helpful breakdown of your revenue by service.
- Multiple accounts: The entire bank transaction recorded in the check register must be assigned to a single account. Amounts recorded through the proper input screens can be assigned to any combination of multiple accounts and items.
- Customer/Project: Amounts entered in the check register cannot be assigned to a customer or project, which prevents QuickBooks Online from preparing accurate profit and loss reports by customer or project.
- Billable/markup: An expense entered in the check register cannot be classified as billable, and a markup percentage cannot be provided. It’s vital to mark expenses that will be billed to a customer as “billable” so that the expense is available to add to the customer invoice.
In addition, checks added in the check register manually cannot be applied against outstanding bills from the vendor. Similarly, payments received from a customer cannot be applied against their invoice if you enter the deposit in the check register.
Transactions entered in the input screens will flow automatically to the check register. If you’ve already entered a transaction in the check register, you can open the appropriate input screen by selecting the transaction in the register and clicking “Edit.” Below is a list of our tutorials that demonstrate the best way to input bank transactions using the input screens:
Enter a Check or EFT to Pay a Bill
Enter a Check or EFT When a Bill Has Not Been Entered
Receive a Payment on a Customer Invoice
Receive a Customer Payment When an Invoice Has Not Been Entered
Record Other Bank Deposits
Transfer Funds Between Accounts
When to Consider Entering Bank Transactions Directly in the Check Register
Entering transactions in the check register is considerably faster than using the input screens. You might consider entering transactions directly in the register if you are doing the bookkeeping after the fact. For instance, if you are doing the 2020 bookkeeping in March 2021, it will be faster to enter all bank transactions as checks and deposits in the check register.
You’ll give up some of the functionality of QuickBooks, such as inventory accounting, profit and loss by customer/employee, and revenue by product, but the data is so old by the time you’re entering it that the reports will be of limited value. Hopefully, you can start keeping the books in real-time going forward, in which case I highly recommend using the input screens discussed above.
How to Enter Bank Transactions in QuickBooks Online Manually
Before entering bank transactions in QuickBooks Online, make sure your bank account is set up in your chart of accounts as we discussed in How to Set Up the Chart of Accounts. I also recommend trying to import your bank transactions before resorting to entering them manually, as done in this tutorial.
While not ideal because of the lack of detailed information, entering bank transactions in the QuickBooks Online check register is very fast. All you need to do is navigate to the register and input the transaction.
1. Navigate to the QuickBooks Online Check Register
Select Accounting in the left menu bar and then click Chart of Accounts to display your chart of accounts list:
2. Open the QuickBooks Check Register
Find your bank account in the chart of accounts and click on View register in the far right column. We’re going to input transactions for Paul’s Plumbing’s checking account with Bank of America:
3. Review the QuickBooks Check Register
All transactions affecting your bank balance will be reflected in the check register, regardless of whether you entered the transactions directly in the register, entered them through the appropriate input screen, or accepted them from your list of imported bank transactions. I highly recommend you complete all fields for each transaction, but the only fields required are Date, Amount, Type, and Account:
- Bank register: This field allows you to see what bank account register you are in quickly. You can switch to a different bank account easily by clicking the drop-down arrow and selecting a different bank account.
- Date: Indicate the date of the transaction you are inputting.
- Ref no./type: Enter the transaction number, such as check number, as the reference number. The transaction type is selected when you create a new transaction and will appear here.
- Payee: For payments, select the vendor or employee for this field. For deposits, select the customer.
- Account: Choose the account from the chart of accounts where the payment or deposit should be characterized. For example, if you are entering a check to pay the monthly rent, choose rent expense.
- Memo: Provide a brief description of the transactions. For example, “July rent check.”
- Class/Location: Assign the transaction to your user-defined Classes and Locations. If these fields don’t appear (and you want to track activity by Class or Location), you need to activate Track Classes and/or Locations, as shown in How to Set Up Advanced Settings.
- Payment: Enter the amount of the check or leave blank for a deposit.
- Deposit: Enter the amount of the deposit or leave blank for a check.
- Reconciled: A checkmark will appear in the column once you indicate the transaction has cleared your bank during the bank reconciliation.
- Balance: This is the account balance after each transaction.
4. Enter Bank Transactions Into the QuickBooks Check Register
To enter a new transaction, click on the drop-down menu immediately beneath column headers in the check register and select either Check or Deposit. There are many other types of bank transactions that will flow from input screens, but everything input directly in the check register can only be designated as either a check or deposit:
The register will now provide a line for you to input the fields as described above. Be sure to click the green Save button when you are finished:
Tip: Never enter a payment received from a customer for an outstanding invoice as a deposit or a payment made to a vendor on an outstanding bill as a check. Doing so will double-count income or expense rather than offset the outstanding invoice or bill. You can learn the correct way to enter these transactions in our tutorials How to Receive Payments and How to Pay Bills.
How to Modify Bank Transactions in QuickBooks Online
In the bank register, highlight the transaction you want to modify. This will enable you to change any of the information you input in the register. You can go to the input screen to add or change additional information by clicking Edit:
You can find information about the input screens for each type of bank transaction by referring to the other tutorials in the table at the top of this article.
You’ve completed another tutorial in our QuickBooks Online Training Course. You’ve learned why it’s usually not a good idea to enter bank transactions directly into the check register, but also how to do so if the need arises for quick data entry. The next tutorial in our QuickBooks Online Training Course is How to Manage QuickBooks Online Bank Feeds. That tutorial will teach you how to accept imported bank transactions as well as how to match them to existing transactions within QuickBooks Online.