In this lesson, we’re going to cover how to connect your bank accounts to QuickBooks Online. We’ll explain how to link your bank account to QuickBooks automatically as well as how to import banking transactions manually using a QuickBooks Online or comma-separated values (CSV) file.
If you cannot locate your bank in QuickBooks Online or if you need to download older banking transactions, you’ll need to import your banking transactions using a QuickBooks Online file or Excel and a CSV file. We’ll cover how to do that later in this lesson.
We’re pleased to provide you this free tutorial for QuickBooks Online, our best overall pick for small business accounting software. We recommend following along with the lesson in your own QuickBooks account. If you don’t already subscribe to QuickBooks, you have the choice of a 30-day free trial or 50% off for three months.
This lesson is one in our series of Free QuickBooks Tutorials. You can watch the video below or follow the step-by-step instructions that include illustrations. The video is from a slightly older version of QuickBooks Online. While the process of importing bank transactions in QuickBooks Online is essentially unchanged, the layout of the screens is slightly different. The step-by-step instructions are from the most current version of QuickBooks Online.
The Importance of Connecting Your Bank Account to QuickBooks
Downloading your banking transactions into QuickBooks Online automatically instead of inputting them manually is an enormous time-saver. Most big banks allow you to connect to QuickBooks quickly and easily. If your bank does not connect with QuickBooks, you can still transfer your banking transactions with Excel and a CSV or QuickBooks Online file.
Tip: Do not combine personal and business activity in the same checking account. You’ll waste time and effort in dealing with personal transactions in your company’s books. Instead, open a checking account specifically for your business. If your business is a sole proprietorship or you are self-employed, the checking account can be a second personal account. If your business is a partnership, limited liability company (LLC), or corporation, read our Best Free Business Checking Accounts.
How to Import Banking Transactions Automatically in QuickBooks Online
The only information you need to connect your bank account to QuickBooks is the username and password used to login to your bank’s website. Once you input your username and password, QuickBooks will stay connected and download transactions daily.
Step 1: Locate Your Bank
Select Transactions and then Banking from the left menu bar of your QuickBooks Online company dashboard:
Then, click the green Connect account button to add your bank account:
Search for your bank by entering either the bank name or the bank’s website URL. Our fictitious sample company, Paul’s Plumbing, has their checking account with Chase.
If your bank is not listed, you’ll have to import your bank transactions with a QuickBooks Online file or through Excel using a CSV file.
After selecting your bank, click the green Continue button to be taken to your bank’s sign-in page automatically.
Step 2: Log Into Your Bank Account
QuickBooks will open a new browser window for you to sign in to your bank account:
After signing in, your bank might ask you to confirm that you want to share your banking information with Intuit and provide a summary of the information to be shared. If you agree, click the appropriate button on your bank’s confirmation page, and you will be taken back to QuickBooks.
Step 3: Link Bank Accounts to Chart of Accounts
Upon returning to QuickBooks, you are provided a list of accounts you have with that bank:
Select all of the bank accounts you would like to link to QuickBooks Online. After you click on an account, a drop-down box will list the bank accounts included in your Chart of Accounts. If your checking account is already included in your Chart of Accounts, select it. Paul’s Plumbing only has one checking account with Chase, and we’ll link it to the account titled Company Checking Account that is already included in the Chart of Accounts.
Creating a New Checking Account in the Chart of Accounts
If your Chart of Accounts (in the drop-down box) doesn’t include the checking account you are connecting, click Add new:
The Account Type must be Bank, and the Detail Type must be Checking. You must name the account, and I recommend the name of the bank plus “Checking Account.” If you have more than one checking account with the same bank, you might also include the last four digits of the account number. When you have entered all the information, click the green Save and Close button, and you will be returned to the prior screen with the new account selected.
Step 4: Selecting the Right Date Range
After assigning your bank account to an account from your Chart of Accounts, you must decide how far back QuickBooks should go to pull transactions.
The default start date to pull transactions is the beginning of the year. You should try to pull transactions back to the date you wish to start using QuickBooks Online. If your bank or QuickBooks doesn’t allow you to go back that far, you’ll have to transfer the older transactions using a QuickBooks Online or CSV file.
You need to decide the date you will begin using QuickBooks Online. For a new company, it should be when the company was formed. For an existing company, I recommend using the first day of the current year or quarter. This is an important decision because this is your only chance to automatically import old transactions. If you import transactions that are too old―from before you started using QuickBooks Online―you’ll need to delete each transaction manually.
Paul’s Plumbing is importing bank transactions back to the beginning of the current year. Click the green Connect button when you are done. It may take a few minutes for QuickBooks to connect your bank account.
Step 5: Review Downloaded Transactions in the Banking Center
QuickBooks Online will take you to the Banking Center after connecting your bank account:
A. Transactions for review: The orange number in the upper left corner of the Banking Center is the number of transactions that were imported from your bank account and are ready to review. Paul’s Plumbing’s checking account had only five transactions imported.
B. Review Tab: The tab labeled For Review lists all the transactions imported from your bank account that are ready for review.
C. Add account: To connect another bank to QuickBooks Online, click the green Add account button in the upper right-hand corner of the screen and repeat the process.
We need to complete a few more set-up lessons before we go through the process of reviewing and classifying the imported transactions. However, you can peek ahead at How to Manage QuickBooks Online Bank Feeds if you’d like to learn more now.
Now that your bank is connected, new transactions will be imported automatically into QuickBooks Online daily. If you visit the Banking Center anytime by clicking Transactions and then Banking from the left menu bar as you did at the beginning of this lesson.
When to Manually Import Transactions Into QuickBooks Online Using a CSV File
There are two scenarios when you must manually import transactions from a CSV or similar file. First, some banks will not connect with QuickBooks Online, allowing for an automatic import. Second, you might need to import older transactions that were not imported in the previous section.
It’s likely that some of the transactions you are importing will already be entered in QuickBooks. For instance, bank transactions are created when you print checks from QuickBooks. This will not create duplicate entries. During your review of imported transactions, you can match them to existing transactions to avoid any duplication.
How to Manually Import Transactions Into QuickBooks Online With a CSV or Similar File
Step 1: Download a Transfer File from Your Bank
QuickBooks Online can import bank transactions from the following types of files:
- CSV: These files are used commonly to export data for a multitude of purposes. An advantage of using CSV files is they can be opened and edited with Excel.
- QuickBooks Online: QuickBooks Online files are QuickBooks WebConnect files specifically designed for exporting information from bank accounts to QuickBooks.
- QFX: QFX files are financial exchange files created for exporting information to Quicken but will also work with QuickBooks Online.
- OFX: An OFX file is a text file specifically designed for exporting financial data.
- TXT: Text files can be imported but might require some editing first. You might want to open the TXT file with Excel and convert it to a CSV file for a smoother transfer.
To obtain a transfer file, log into your bank account, and find the option that allows you to download your account transactions. You will likely have to select a file format to download your transactions. Choose the QuickBooks Online or QFX format if available since these file types are designed specifically for QuickBooks and will require less work. The next best option is an OFX file, but if that is not available, a CSV or TXT file will suffice.
Save the transfer file to a location on your computer that you can remember to import the file automatically.
Step 2: Select the Transfer File to Upload in QuickBooks
From the Banking Center, open the drop-down menu next to Update in the upper right corner and then select File upload:
Click the Browse button and select the transfer file that you downloaded from your bank and save it to your computer.
Our sample company, Paul’s Plumbing, was able to download a QuickBooks Online file from their local credit union, where it has a second checking account. When you have selected your transfer file, click the green Next button in the bottom right corner of the screen.
Step 3: Select a QuickBooks Account
Next, you must select an account from your Chart of Accounts to record the imported bank transactions:
If needed, you can click Add new to set up a new checking account as demonstrated earlier. Paul’s Plumbing created a new QuickBooks account named Local FCU. After you have selected a QuickBooks account to record the imported transactions, click the green Next button in the lower right-hand corner.
If your transfer file is a QuickBooks Online, QBX, or an OFX file, you’re done and can skip to Step 6.
If your transfer file is a CSV or TXT file, you have a few more steps to complete.
Step 4: Map Columns to QuickBooks Fields (CSV and TXT Files Only)
Before completing this step, you should open your CSV or TXT file in Excel to determine exactly what information your bank exported and how it is formatted. Paul’s Plumbing exported the following CSV file from their local credit union account:
Notice that transaction amounts are shown in column E with deposits shown as positive numbers and withdrawals shown as negative numbers. Some banks might include deposits in one column and withdrawals in another column.
After completing step 3, if you’re importing a CSV or TXT file, you should be on the following QuickBooks screen:
You need to tell QuickBooks where it can find the date, description, and amount in your transfer spreadsheet.
A. First row in file is a header row: Place a checkmark in this box if the first row in your transfer spreadsheet provides the title for each column.
B. Date: Click the drop-down arrow and select the column in your transfer spreadsheet that contains the date of the transaction. In the next field, select how your spreadsheet formats the date.
C. Description: Select the column that contains a description of the transaction. Paul’s Plumbing chose the Memo column as the description.
D. Amount: First, choose whether your spreadsheet has all amounts in one column or if deposits and withdrawals are in separate columns. As we saw above, Paul’s Plumbing’s spreadsheet has all the amounts in one column, which is located in column E. If you indicate amounts are shown in two columns, you’ll need to specify one column for money spent and another for money received.
When you are satisfied with your mapping, click the green Next button in the bottom right corner of the screen.
Step 5: Select Transactions for Import (CSV and TXT files only)
You can select which transactions from your file to import. I highly recommend importing all transactions in the file. Even personal transactions in your business account need to be imported and accounted for. Transactions already recorded in QuickBooks can also be imported and will not be duplicated as you can match them to existing transactions when you review your bank feed later.
Make sure all transactions are selected and then click the green Next button in the bottom right corner of the screen to complete the import of your transactions.
Tip: If there are no transactions listed on this screen, make the following changes to your file:
- You should remove all formatting from the amount column, even dollar signs.
- Blank rows must be removed so that everything begins at row 1, column 1 of the spreadsheet.
After you make changes to your spreadsheet, you must save it and then back up to step 2 and reselect the file to import.
Step 6: Return to the Banking Center
Click on Transactions and then Banking from the left menu bar to return to the Banking Center. Your bank account now is shown in the upper left corner with the number of transactions awaiting review.
We’ll learn how to review the transactions and accept, exclude, or match them to an existing transaction in How to Manage QuickBooks Online Bank Feeds.
You’ve now learned to connect your bank to QuickBooks Online and to import bank transactions manually when an automatic bank connection is not available. We’ll return to managing bank feeds in a later lesson but, first, we must finish setting up your QuickBooks Online company. The next lesson in our QuickBooks Online Training Course is How to Import Credit Card Transactions. That lesson will cover both how to connect a credit card account to update transactions automatically and how to import transactions from a CSV file.