Welcome to the Fit Small Business QuickBooks Online training course. In this lesson, we’re going to cover how to manage downloaded credit card transactions in QuickBooks Online.
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To complete this QuickBooks Online lesson, you can either watch the video below, read through the step-by-step instructions, or do both. Let’s begin.
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Why It’s Important to Manage Downloaded Credit Card Transactions in QuickBooks Online
When you import credit cards transactions into QuickBooks, they are unposted. This simply means you need to review them and provide some additional information before they can be added to your register in QuickBooks. In this lesson, we show you how to review and categorize your credit card transactions so they can be added to your register and financial statements.
QuickBooks Online Transactions Banking Center Layout
The banking center layout in QuickBooks is a dashboard of all of your bank and credit card accounts you have set up in QuickBooks. It includes total bank balances, your QuickBooks balance, and the number of transactions that need to be reviewed for each account here.
The QuickBooks banking center includes all of the bank and credit card accounts you have set up, as indicated below:
A brief description of the information you can find in the banking center is below:
- Accounts linked to QuickBooks: Credit card accounts that you have linked to QuickBooks show the credit card balance as of the date of the last sync in the top blue section of the tile.
- Current balance in QuickBooks: The bottom portion of the account box displays the current balance in the QuickBooks register and the number of transactions needing review. These transactions are listed individually under the For Review tab.
- Accounts not linked to QuickBooks: If the account is not linked, it will show $0.00 in the top portion of the box.
- Current balance in QuickBooks for accounts not linked: Similar to the linked account, the bottom portion of the account box displays the current balance in the QuickBooks register and the number of transactions in the transactions For Review tab.
- Downloaded bank feed transactions: Bank feed transactions that have been automatically downloaded are organized into three groups:
- For Review: This tab shows all of the unposted transactions. When you import transactions into QuickBooks, this is where they appear until you review them and take action.
- In QuickBooks: This tab shows all of the transactions that have been matched or added to the register in QuickBooks.
- Excluded: This tab shows the transactions that have been removed from the For Review tab.
How Do I Manage Downloaded Credit Card Transactions in the Banking Center?
Connecting your credit card accounts to QuickBooks allows transactions to automatically download into your QuickBooks file so that you don’t have to enter them manually. However, you still need to review the transactions that have downloaded and decide what action you need to take. First, you navigate to the banking center. Next, you review the transactions that have downloaded and ensure they have the proper account coding before posting them to the QuickBooks check register.
Step 1 – Navigate to the Banking Center
From the homepage, click on Transactions located on the left-hand menu bar and select Banking as indicated below.
Step 2 – Review Transactions Tab
You should begin with the transactions that are located on the For Review tab. Within this tab, transactions are categorized into two additional tabs:
- All: This tab lists all transactions (including those on the Recognized tab)
- Recognized: If QuickBooks recognizes a transaction that is already recorded in your register, it displays a green match tag next to the transaction and adds it to the Recognized tab as indicated below.
To add the transaction to the register, just click the Match link located in the Action column indicated below. QuickBooks then adds the transaction to the QuickBooks register and includes it in your financial statements.
Most people tend to be creatures of habit. Whether you’re running out to grab lunch or to the office supply store to get ink for the printer, you most likely purchase these items from the same retailers. QuickBooks recognizes vendor names or descriptions you have previously downloaded and makes suggestions as to which account transactions should be coded to. If you accept the suggested account, QuickBooks changes the account for all transactions of that same name.
For example, if you have previously coded Bluehost.com transactions to your advertising account (as indicated below) then the next time a Bluehost.com transaction is downloaded, QuickBooks suggests coding it to the advertising account. If you accept the suggestion then QuickBooks categorizes all transactions with the Bluehost.com description to the advertising account.
Step 3 – Add a New Credit Card Transaction to the QuickBooks Register
Before adding a transaction to the check register in QuickBooks, you need to ensure that the payee or customer info, amount, transaction date, and account type are correct. This is important because once a transaction is added to the register you also record it in the financial statements.
Click on the credit card transaction you want to add to the register and complete the fields as indicated below.
- Select payee or custom: Select the vendor from the drop-down menu. If you have not set up the vendor yet, you can do so by selecting Add from the drop-down menu. Be sure to view our tutorial on setting up vendors.
- Account: From the drop-down menu, select the account you want to code the transaction to (e.g., advertising expense, office supplies, etc.)
- Memo: Briefly describe what the expense is for in this field.
- Add transaction to QuickBooks register: Click Add to add this transaction to your QuickBooks register and financial statements.
Troubleshooting QuickBooks Online Transactions
When you manage downloaded credit card transactions in QuickBooks online, you may run into a couple of common issues. First, transactions that have already been matched with another transaction in QuickBooks and second, an error signing into your bank account. If you do encounter these issues, you will need to troubleshoot them.
Two common issues you may encounter when managing QuickBooks online transactions include:
QuickBooks Online Transactions Already Matched
Sometimes a downloaded transaction has been matched to the wrong transaction in the register. This can happen for a number of reasons, but it’s usually because the register transactions are for the same amount and fall within the same date range. Follow the steps below to fix this issue.
First, click the In QuickBooks tab in the banking center and click Undo next to the transaction as indicated below.
This flags the transaction as unposted and returns it to the For review tab where you can match it to the correct transaction.
Sign-In Information Error
If you see a red error message similar to the one below, your user ID or password has most likely changed, and you need to update QuickBooks with this information.
First, click on the Fix it link as indicated below, and follow the on-screen instructions to update your user ID and password:
How Bank Rules Let You Code QuickBooks Online Transactions Quickly
You can reduce the amount of time it takes to code and record transactions in the Banking Center by setting up bank rules. QuickBooks will use the bank rules you set up to automatically code transactions to the right account for you. Let’s create a bank rule for the Bluehost transactions.
Follow the steps below to create bank rules to manage downloaded credit card transactions in QuickBooks Online:
1. Create Bank Rules to Manage Downloaded Credit Card Transactions
Setting up bank rules to manage downloaded credit card transactions can save you a lot of time. Instead of manually assigning a general ledger code to income and expenses, QuickBooks automatically codes your expenses for you.
Click on the drop-down arrow to the right of the update button and select Manage rules, as indicated below:
2. Click New Rule
Click the New rule button in the upper right corner of the screen to create a new rule as indicated below:
3. Set Up Conditions for Rule
To create a new rule, you must provide key information such as the type of transaction the rule applies to (money coming in, money going out, or both). You must select the bank account(s) that the transactions will appear in, and the bank’s description of the transaction, such as the payee’s name and type of expense.
Complete the following fields to set up the conditions for the new bank rule, as indicated below:
Below are nine key information fields that must be completed to establish the conditions of a bank rule:
- Rule name: Give each rule a name.
- For: Select whether the rule applies to money in (credit card returns) or money out (credit card charges).
- In: From the drop-down, you can select which credit card account this rule applies to. The default is All bank accounts.
- Conditions: You have the option to determine if the transaction has to meet all or any of the following conditions that you set by selecting options from the following drop-down menus. When the conditions are met, the rule is triggered.
A. Select any or all
B. Select bank text, description, or amount as a condition.
C. Select contains, is exactly, or doesn’t contain, depending on how you want your rule to work.
D. Enter the bank text, description, or amount.
- Transaction type: Select whether the transaction is an expense, transfer, or check.
- Payee: Select the payee (if applicable).
- Category: Select the account the transaction should be categorized to. (e.g., office supplies, meals, or entertainment).
- Memo: Enter any additional information in this field for this transaction.
- Automatically add to my books: When you select this option, QuickBooks bypasses putting these transactions on the Recognized tab, which would then require you to review them before they are added to the register. Instead, QuickBooks automatically adds them to the register.
TIP: I recommend that you still review these transactions in the register to ensure that the rule is working as you expect it to.
That wraps up the section on how to manage downloaded credit card transactions in QuickBooks Online. The next lesson in our QuickBooks Online Training Course is How to Record a Credit Card Return. In this lesson, we walk you through when you need to record a credit card return, how to record credit card returns, and the impact this has on your financial statements.
To access this lesson or any of the others in the series, click the links below. To get started with QuickBooks, sign up for a free 30-day trial of QuickBooks Online.
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