Overview of the bank review window

Key takeaways:

  • To access the bank review window click on the name of any bank account on the right side of the dashboard or click on the side menu and go to Banking -> Banking.
  • The Update button tells QuickBooks to download transactions from your bank. Say hello to sweet sweet automation. 
  • Downloaded transactions are not added to QuickBooks until you press the Add button. Until you press Add these transactions are just data that QuickBooks has collected from your bank and are in bookkeeping limbo. 

How to categorize income and expenses 

Key takeaways:

  • QuickBooks Online tries to help you with your bookkeeping by guessing the income or expense category. Don’t assume that because QuickBooks Online has guessed a category that it’s the right category. It’s up to you to review and change the categories.
  • The “Description” field does not automatically become the Payee name. You must enter the Payee name for every transaction in QuickBooks Online or it will not have a vendor assigned to the transaction. 
  • QuickBooks Online will remember the last category used for each Payee. If it’s green it means QuickBooks Online is remembering a category you used before. If it’s black, it means QuickBooks Online is guessing and the category could be incorrect. 

Categorizing transfers 

Instructions:

  1. Click on a transaction that is a Transfer
  2. Choose the Transfer radio button
  3. From the dropdown menu, choose the account you are transferring money to or from. 
  4. Click Transfer

Tips:

  • QuickBooks Online is smart enough to recognize when one transaction impacts two accounts. In the second account impacted by the transfer, QuickBooks Online will MATCH the debit or credit you categorized as a transfer to the corresponding downloaded transaction. This ensures that you don’t inadvertently add a duplicate transaction. These transactions show up in the Bank Review window as a matched transaction and you press Match to add it to QuickBooks. 

Categorizing shareholder distributions/ contributions

Key takeaways:

  • Shareholder Distributions is an equity account, which means it won’t show up on your Profit & Loss report because it’s NOT an expense. 
  • Use this category any time you take money out of your business for personal use, such as:
           - Accidentally using the wrong card
           - Accidentally paying a personal credit card with biz account
           - Taking your monthly or annual shareholder distributions
  • If you put personal money into your business, categorize the deposit as Shareholder Contribution.

Categorizing split transactions 

Instructions:

  1. Click on the transaction.
  2. Click Split.
  3. Enter the Payee name.
  4. Choose the 1st category and enter the amount that should be allocated to that category. 
  5. Choose the second category and enter the amount that should be allocated to that category. 
  6. Click Add Line if you need more than 2 categories. 
  7. Click Save and Add. 

Tips:

  • It’s impossible to mess this up! QuickBooks Online will not let you add a transaction if the amounts aren’t split correctly. If you haven’t calculated the split correctly, you’ll see the difference in red at the bottom of the window. 

Undoing mistakes 

Instructions:

  • Click In QuickBooks. You will see a list of all transactions added to QuickBooks Online. 
  • Find the transaction you want to undo.
  • Click Undo. This will bring the transaction back into review window. 
  • Edit the transaction and re-add. 

Tips:

  • Be careful about undoing reconciled transactions. If it’s reconciled and you undo it, it will unreconcile the transaction. This will affect your future reconciliations and be a total bookkeeping buzzkill. 
  • Only use the Undo option for unreconciled transactions. 

Excluding transactions 

Instructions: 

  1. Click the checkbox next to the transaction you want to exclude
  2. Click the arrow next to Batch Action
  3. Click Exclude.
  4. The excluded transaction will appear in the Excluded window. To un-exclude it, press undo and the transaction will be brought back into the Bank Review window.

Tips: 

  • Don’t exclude personal transactions as a way of making them go away- this will affect your reconciliation. Instead, categorize it as “Shareholder Distribution.” 

Refunds/Returns 

Key takeaways: 

  • Always categorize refunds back into the category used for the initial purchase.

Manually Entering Cash Expenses

Instructions:

  1. On your Dashboard, click on the Cash in Hand account. This will open your cash register. 
  2. Click Add Expense. If the Add Expense button isn’t showing, click on the small down arrow on the top left of the register. A drop down menu will appear. Find Add Expense (this button will default to the last one used). 
  3. Enter the date, Payer information, and payment amount. 
  4. In the Account box find the corresponding expense category.
  5. Click Save

Matching Gusto Journal Entries 

Key takeaways: 

  • Gusto is connected to QuickBooks Online (let’s hear it for automation!) and will automatically enter in payroll information like:
    - The total amount debited from your bank account
    - Amount of the debit that went towards your salary
    - Amount of the debit that went towards payroll taxes
  • When the payroll debit is downloaded from the bank, QuickBooks Online will match the downloaded transaction to what Gusto entered in for you. You just press Match. 
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