Bank Feeds in QBO

Navigating Bank Feeds in QuickBooks Online

When working within the bank feeds in QuickBooks Online (QBO), it can become overwhelming reviewing all the options available. While the bank feeds are intended to streamline the bookkeeping process and make tasks run smoother, it's still important to know that the bank feeds demand a fair amount of work themselves. For business owners unfamiliar with bookkeeping, it can be tempting to go through the bank feeds clicking "add" or "match" without delving into the nature of the transaction. Bank feeds are a misunderstood tool. While QBO may provide these options, and some may be correct, if you click whatever default options QBO suggest, your books will get messy fast! Here is a brief overview of some of the choices in QBO bank feeds.

ADD

This is without question the most frequently-used function in QBO bank feeds. The overall purpose of the feeds is to help you get your data into QBO. To "add" transactions in makes the most sense. After you select a vendor and an account category, you click the "add" button for that transaction in the bank feeds, and said transaction is automatically added to your books. It will now show in the vendor information, your selected account category register, and on the appropriate reports. For many transactions, this is all you need to do when you notice them in the bank feeds.

MATCH 

This option is where things get sticky. QBO offers a "match" option by default for many transactions, which makes it too easy to click it and think you're done. However, when you go to your reports or go to reconcile, it's common to find that a "matched" transaction in the bank feeds doesn't show up. This happens when you "match" a transaction to another transaction incorrectly.

Matching, when used correctly, prevents double counting in your books. This is primarily used when you manually enter transactions, and then ALSO load in via bank feeds. For example, if you wrote a $100 check to your local supply store for printer ink, you would code that in via the "check" function in QBO. Then, if said transaction loaded into the bank feeds later, you would verify that QBO had correctly selected the correct match (that $100 check you wrote and entered previously). If the transaction has been correctly suggested by QBO, then you would click "match" and QBO would count that transaction as only ONE transaction total in the books. This is how matching works. However, if you were to incorrectly "match" that transaction to a DIFFERENT $100 check that you wrote months prior (QBO will at times suggest incorrect matches), then your new transaction would no longer exist in the books. In this instance, you've essentially told QBO that this transaction is THE SAME TRANSACTION as the incorrect transaction, and this is what often creates messy books.

Using matching properly in the books is a great way to keep your books clean and up to date, but it can go wrong quickly if you're not careful to verify the accuracy of the matches.

TRANSFER

A transfer in QBO should be used when you're transferring money between bank and credit card accounts. This can be confusing for some small business owners, because bank statements often use terms like "electronic transfer". This can lead people to assume that "transfer" is the correct QBO option when it often is not. Transfers are used when you move money between accounts. This makes sure that these amounts aren't counted as income/expenses, but rather just the movement of your money. Transfers are used in QBO when you withdrawal (draw) money from your checking account to cash. Transfers are also used if you send money from checking to savings, or when you pay your own credit card bill. It's especially important to use transfers correctly if you have multiple accounts with money moving between them frequently. QBO makes this simple in the bank feeds, but similar to matches, you must make sure that the proper accounts are selected, or things can get prickly fast.