This article is part of a larger series on Accounting Software.
This guide will cover how to manage downloaded credit card transactions in QuickBooks Online. We’ll also show you how to review the transactions, match them to an existing transaction, apply them to an unpaid bill, or categorize them as an expense. You’ll also learn how to create a rule to help QuickBooks better remember transactions.
We hope you find this course and our series of QuickBooks Online tutorials helpful as you learn how to get the most out of QuickBooks Online, our best small business accounting software. You can follow along in your account to better grasp the lesson, so if you don’t have an account, choose from a 30-day free trial or 50% off for three months.
Step 1: Navigate to the Banking Center
Step 2: Review Downloaded Transactions
The top portion of the Banking Center displays each checking and credit card account that you have connected to your QuickBooks account. If you haven’t connected your credit card account, follow the steps in our tutorial on how to import credit card transactions. Once connected, click on the balance summary at the top of the Banking Center.
The summary box displays the account balance reported by your bank and the balance from your QuickBooks account register. Transactions that are downloaded into QuickBooks are already reflected in the bank balance. However, downloaded transactions don’t affect your QuickBooks balance until you review and accept them.
Don’t forget to reconcile.
The bank balance and QuickBooks balance should be the same once all your transactions are reviewed. If there’s a difference, you should be able to find it when you reconcile your credit card account at the end of the month.
The orange number in the bottom-right corner of the credit card account summary box is the number of transactions downloaded from your bank account that haven’t yet been reviewed and accepted, matched, or excluded. A list of transactions to review will appear in the lower half of the Banking Center under the For review tab, as shown below.
You can specify which columns will appear under the For review tab by clicking on the settings cogwheel directly above the last column.
Step 3: Compare Downloaded Transactions to Existing QuickBooks Transactions
To avoid duplicate transactions and incorrect credit card balances, match downloaded credit card transactions with those you’ve already entered in QuickBooks Online. QuickBooks searches for existing transactions that match the imported transaction automatically. If any are found, the word “match” will appear in the Action column on the far right.
Clicking on Match will connect the transactions immediately, so we suggest refraining from doing so until you review the match, which you can do by clicking anywhere on the transaction screen—except in the Action column.
Matching Existing Transactions
The example above (equipment purchase) is a match found with an existing transaction. This match occurred because the credit card charge was entered manually into QuickBooks at the time it was made. By clicking the green Match button, the credit card transaction will move from the For review tab to the Categorized tab, but no transaction will be created in the QuickBooks register since the transaction already exists.
Matching Unpaid Bills
To determine if your downloaded credit card transaction is likely a bill payment, QuickBooks will scan the list of unpaid bills you’ve entered. In the example below, Paul’s Plumbing entered a bill for an equipment purchase for $394.06 on March 7, 2022. The bill was paid with a credit card, but the payment wasn’t recorded in QuickBooks.
Clicking the green Confirm button allows QuickBooks to create a new transaction in your QuickBooks register, recording the credit card charge and offsetting the unpaid bill or accounts payable (A/P).
Finding Other Matches
If you made a partial payment on an outstanding bill, QuickBooks won’t suggest a match automatically since the amount of the charge is different from the bill. Click Find other matches in the transaction detail to provide a list of outstanding bills and indicate which bill the credit card will be applied to.
You might also have to use the Find other matches button for matching transactions where the amounts are, in error, slightly different. You’ll need to correct the QuickBooks transaction amount to match the actual credit card charge before you can match the transactions.
Step 4: Create New Credit Card Transactions
You’ll need to create a new transaction if the credit card transaction hasn’t been recorded manually in QuickBooks and isn’t a payment of an outstanding bill.
In the above example, QuickBooks suggests that the credit card charge is categorized as “Utility Expense.” We highly recommend you complete all fields for the transaction as if you were recording the transaction manually.
You’ll want to fill in the Vendor/Customer field so that every transaction with that vendor or customer is grouped accordingly in QuickBooks. You’ll also need to tick the “Billable” box and add to the Customer field if you’ll bill the customer for the expense; skipping this means you’ll be unable to add their payment to your invoice.
Create a Rule
Click on Create a rule at the bottom of the transaction detail to create a rule based on the information you entered in this transaction.
The “Create rule” form is similar to the one you learned about in our tutorial on how to manage QuickBooks Online bank feeds.
Scroll to the bottom of the form to specify other fields, such as payee, class, location, and memo.
Why It’s Important To Manage Downloaded Credit Card Transactions in QuickBooks Online
After you import credit card transactions into QuickBooks Online, you must tell the platform how to classify the transactions. Imported credit card transactions don’t transfer into your account register automatically. Instead, they appear as transactions awaiting review in the Banking Center. Using the Banking Center, you must do one of the following for each credit card transaction:
- Match the transaction to an existing QuickBooks transaction.
- Apply the transaction against an unpaid bill in QuickBooks.
- Create a new expense transaction and provide an expense category.
Don’t Exclude Transactions
While the option exists in QuickBooks, you shouldn’t exclude transactions imported from your credit card account. Every transaction, including personal transactions of the owner, must be recorded in QuickBooks Online for the credit card account to reconcile and your books to be complete. Read our bookkeeping tips if you need help handling personal transactions.
You successfully learned how to manage downloaded credit card transactions in QuickBooks Online and how to match them to existing transactions and apply them against unpaid bills. You also learned to create a rule so that QuickBooks can provide greater detail when suggesting new transactions. The next guide in our QuickBooks Online Training Course is how to enter a credit card refund for when you receive one from vendors.