This article is part of a larger series on Accounting Software.
In this tutorial, we’re going to show you how to manage QuickBooks Online bank feeds. By using the QuickBooks Online Banking Center, you can add imported bank transactions to the QuickBooks check register as a new transaction or match them to an existing transaction. We’ll also show you how to set up bank rules so that you can reduce the amount of time it takes to classify transactions in the Banking Center.
This course—which is part of our free QuickBooks tutorials—is designed to help you learn how to use QuickBooks, our leading small business accounting software. To benefit the most from our video and step-by-step instructions, we encourage you to follow along in your account. If you don’t have one yet, get either the 30-day free trial or 50% off for three months.
Step 1: Go to the Banking Center
To open the QuickBooks Online Banking Center, hover over Banking (previously Transactions) from the left menu bar, and then click the Banking dropdown, as shown below.
The QuickBooks Online Banking Center includes a tile across the top for each bank and credit card account that’s connected to QuickBooks. Each tile includes the name of the financial institution, the current bank balance, and the current account balance in QuickBooks. If your bank isn’t shown in a tile at the top of the screen, it isn’t yet connected to your QuickBooks Online account. See our tutorial on How To Import Bank Transactions Into QuickBooks: Excel & More to connect your bank account.
A. Bank balance: This is the actual balance in your bank account as of the last time QuickBooks imported your banking transactions.
B. QuickBooks balance: This will be different from the bank balance as a result of bank transactions that haven’t been added to the check register, or transactions in the check register that haven’t been processed by the bank, such as checks recently issued.
C. Bank feed transactions: Transactions imported through your bank feed are organized into three tabs:
- For Review: Imported transactions initially appear in the For Review tab where you must add, match, or exclude them.
- Categorized: After adding and matching the transactions in the For Review tab, they’re displayed in the Categorized tab, which means they’re already recorded in the check register.
- Excluded: The Excluded tab lists imported transactions that you have chosen to not transfer to your QuickBooks check register. Excluding should be extremely rare and likely only used when correcting for a previous error. All bank transactions―even if personal―must be entered into the QuickBooks check register.
The bank balance (A) and QuickBooks balance (B) may not match after you add and match all transactions for review due to transactions that haven’t yet cleared the bank but have been entered in the check register. A bank reconciliation verifies the difference between A and B due to timing differences, so reconcile your bank accounts regularly to avoid certain errors, such as adding a transaction that should have been matched to an existing transaction or excluding a bank transaction. See our tutorial on how to process bank reconciliations.
Step 2: Examine Transactions in the For Review Tab
All newly imported banking transactions will appear in the For Review tab at the bottom of the Banking Center screen.
Each transaction in the For Review tab must be added to the check register, matched to an existing transaction already in QuickBooks, or excluded from QuickBooks.
Step 2.1: Match Imported Transactions to Existing Transactions
It’s critical that imported transactions are matched to any existing transactions instead of being added as new transactions. If you add transactions that already exist, the check register will include them twice, and your bank account and financial statements will be wrong. Some examples of imported bank transactions that will already exist in QuickBooks include:
- Checks printed from QuickBooks
- Deposits of customer payments already recorded as a collection of an invoice amount
A great feature of QuickBooks Online is that payments can be matched against outstanding bills, even if you haven’t recorded the payment in QuickBooks. When you match a payment to an outstanding bill, QuickBooks will create a bill payment transaction and record it in the check register.
QuickBooks Online will propose any matches for your imported transaction automatically. To review the details of the match, click anywhere on the transaction. When you are satisfied that the match is correct, click on the green Match button:
The matched transaction will move from the For Review tab to the Categorized tab. You can undo the match by clicking on the Reviewed tab, locating the transaction, and clicking Undo.
Step 2.2: Add New Transactions
Imported transactions that have not been entered into QuickBooks can be added as new transactions to the check register. An example might be an electronic payment of an expense where the bill was not recorded in QuickBooks. To add a transaction, click anywhere on the transaction to open more detail.
The only requirement to add a new transaction is to provide a category, or account, from your chart of accounts. However, we highly recommend that you also provide the vendor, customer/project, class, and location so that QuickBooks has all the available information to run useful management reports. If class and location do not appear on your screen, you need to enable Class and Location tracking in the advanced options.
How To Create Bank Rules to Streamline QuickBooks Online Bank Feeds
Step 1: Navigate to Manage Rules & Create a New Rule
Click on the Rules tab at the top of the banking center, then click the green New rule button, as shown below.
Step 2: Set Up Conditions for New Rule
The Create rule screen collects data on how to identify intended transactions and then how to classify them. In the example below, we’ll apply bank rules for NYC Electric Co. with the following condition: any money out transaction with bank text as “NYC Electric Co” and with an amount less than $500 is categorized automatically as utilities expense.
A. Name: Provide a name for the rule that will make it easy to identify later.
B. Transactions: Indicate whether you want the rule to apply to transactions that are Money out or Money into either all bank accounts or specific bank accounts.
C. Conditions: Specify one or more conditions that the transaction should meet to be classified under your new rule. If you specify multiple conditions, you can choose whether the transaction must meet all the conditions or at least one of the conditions.
Conditions can reference the transaction’s description, bank text, or amount. If the condition is based on the transaction’s description or bank text, you can specify that it must contain, doesn’t contain, or exactly matches the text you enter. Conditions that reference the amount of the transaction can specify the amount must be equal to, not equal to, greater than, or less than the value you specify.
Here are some examples of conditions you could specify to make a rule:
Text or Amount
Is less than
D. Assign transaction: In the final section, you tell QuickBooks Online how to assign the transaction. You can specify the following fields for each transaction that meets the conditions you set. By expanding the Assign link, you can specify other fields, such as payee, customer, tags, class, location, and memo.
Be sure to click the green Save button when you are done creating your rule.
Why It’s Important To Manage QuickBooks Online Bank Feeds
Bank transactions imported into QuickBooks Online from your connected bank accounts aren’t entered into the check register automatically. You must review each transaction in the Banking Center, match it to any existing transaction already in QuickBooks Online, and then click to add it or exclude it from the check register.
Congratulations on the completion of another tutorial in our QuickBooks Online Training Course. You’ve learned how to classify transactions imported from your connected bank accounts and to create rules that will classify transactions in QuickBooks Online automatically. Our next tutorial is How to Record Bank Deposits in QuickBooks Online, and it’ll look at how to record the deposit of individual checks and groups of checks using the undeposited funds account.