QuickBooks Online, QuickBooks Online Advanced

Banking Features in QuickBooks Online Explained

Business owner connecting his credit card account to QuickBooks Online Advanced

When it comes to managing your business finances, QuickBooks Online’s banking feature stands out as a game-changer. This robust feature allows you to seamlessly integrate your bank accounts and leverage advanced tools to optimize your banking and cash management workflows.

QuickBooks’ banking feature offers a range of capabilities designed to streamline your financial management. Let’s dive into the key features and functionalities.

Bank Account and Credit Card Connection (Bank Feeds)

QuickBooks Online allows you to connect your bank accounts and credit cards directly to the platform (called bank feeds). This integration establishes a secure and seamless connection between your financial institution and QuickBooks Online. By linking your accounts, you can easily import and reconcile banking transactions within the software.

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It’s easy to connect your bank and credit card accounts to QuickBooks Online. First, you’ll need to log in to your QuickBooks Online account and navigate to the Banking Center, which you can access on the Banking tab on the left navigation menu. From there, you can select the option to connect a new account and search for your financial institution. QuickBooks Online supports 20,000+ local and international banks and credit card providers, making it highly likely that your institution is on the list.

Select your bank to connect to QuickBooks Online

Automated Transaction Import

Once the bank feed is established, QuickBooks Online starts importing your transaction data on a daily basis. This includes deposits, withdrawals, and other financial activities. As new transactions are imported into the bank feeds, QuickBooks Online presents them to you for review and categorization. The platform provides a user-friendly interface where you can see the transaction details and make any necessary adjustments.

You can review the imported transactions from the Banking Center. 

Banking Center in QuickBooks Online Advanced

Transaction Categorization

QuickBooks Online automatically categorizes imported transactions based on existing rules and historical data. It uses intelligent algorithms to match transactions to the appropriate accounts, such as income, expenses, or specific customer or vendor records. It then suggests the most likely category based on the patterns it has identified. For example, if you frequently make payments to a specific vendor, QuickBooks Online may automatically assign those transactions to the appropriate expense category associated with that vendor.

As you review and approve transactions in the bank feeds, QuickBooks Online learns from your categorization decisions. It becomes smarter over time and improves its accuracy in suggesting categories for future transactions. This means that as you continue to work with the bank feeds and categorize transactions, QuickBooks Online becomes more adept at accurately categorizing similar transactions in the future.

You can review downloaded transactions in the For Review tab of the Banking Center. If a match is found, you’ll see a Match button under the Action column. If no match is recognized, you’ll see an Add button which lets you create a new account for the transaction. 

Transactions for review in QuickBooks Online Advanced

Bank Reconciliation

To begin the bank reconciliation process in QuickBooks, select Accounting on the left navigation menu and then click on Reconcile. Next, select the bank account you want to reconcile. QuickBooks then shows a summary of cleared transactions at the top as well as a detailed list of transactions found at the bottom.

Your goal is to trace the transactions on the detailed list to your bank statement. If you see a match, simply click on the radial button next to the transaction and then check the transaction on your bank statement. By clicking the radial button, the transaction will be included in the summary of your cleared transactions.

Bank reconciliation screen in QuickBooks Online Advanced

Once all the transactions have been reviewed and matched, QBO calculates the ending balance and compares it to the ending balance on your bank statement. If the two balances match, the reconciliation process is complete, and your records are considered accurate. 

Rules and Automation

You can create rules that automatically categorize transactions based on specific criteria such as payee names, transaction amounts, or transaction types. These rules help save time by reducing the need for manual categorization, especially for recurring transactions. When a transaction matches the criteria you’ve set, QuickBooks automatically applies the designated action or categorization without any manual intervention.

For example, let’s say you frequently receive payments from a particular customer. You can create a banking rule that recognizes transactions from that customer based on their name or other identifying details. You can then specify that any transaction from that customer should be automatically categorized as “Sales” or assigned to a specific income account. This saves you time and ensures consistent categorization for future transactions from that customer.

Bottom Line

With its automated transaction import, intelligent categorization, and powerful banking rules, QuickBooks Online streamlines the entire banking process, saving time and ensuring accuracy in your financial records.

Have Questions? Need Help?

If you have any questions about the features of QuickBooks Online, you can give us a call at 866-949-7267 and one of our experts can walk you through the details. 

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