 QuickBooks Online 2023, credit card, bank feed, and data. Get ready to start moving on up with QuickBooks Online. Here we are in our bank feed practice file. We started up in a prior presentation using the 30-day free trial. We also have open the free QuickBooks Online sample company. If you want the two open at the same time, we suggest using support accounting instruction by clicking the link below, giving you a free month membership to all of the content on our website, broken out by category, further broken out by course. Each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. The Incognito or another browser to open the sample company. You can open the Incognito if using Google Chrome by selecting the three dots in the browser Incognito window, typing into the search engine, QuickBooks Online Test Drive. We're using the sample company to compare the accounting view, the one the bank feeds practice file is in, and the business view, the one the sample company is in. You can toggle between the two views by going to the cog up top and switch the view down below. Opening up some tabs, duplicating them in other words to put reports in by right-clicking the tab up top and duplicate. Perfect duplicate. Right-click the tab up top again and then duplicate. Back to the tab to the middle to open up the report. Which report is it? Oh, I don't know. Let's switch things up this time a bit and open up the balance sheet. If you're in the business view, by the way, the reports are in the business overview reports on the left-hand side. That's where they are. That's the location of them. Let's go to the tab to the right and then back to the reports on the left. This time the P of the L, the profit and the loss, the income statement. I'm closing the hamburger. I'm changing the range. 0-1-0-1-2-2 tab, 12-3-1-2-2 tab. Running it to refreshing it, tabbing to the middle, closing the hamburger, scrolling up, and the range. It needs to change, man. Things need to change around here. 12-3-1-2-2. That stuff had enough. Run it to refresh. Running, running, running, running, running, running, run! Okay. No need to get angry. We're going to go tab to the left and now open up the banking, because that's what we're working on. So that's in the banking area. There's our bank feed stuff. If you're in the business view, by the way, the banking is located in the bookkeeping on the left-hand side, and then the transactions up top, and then the bank transactions is where they're located over there in the business view. All right. So last time we set up our check-in account, and then we're like, that makes things way easier. Can I do that with my credit card accounts too? And the answer, of course, yes, you can. We could do it with the credit card. So now I've got the drop-down. I've got the two tags up top representing the credit card, the credit card being very similar to the checking account, in that every time we link something, it'll basically be linked to, like, an expense, for example. But instead of the checking account going down, we're going to have a liability account, the credit account going up. We're not going to have basically the deposit side of the checking account. So remember, when you're looking at the checking account, you're thinking of the two kind of components, the vendor cycle or expenses cycle and the customer or deposit cycle. At the end of the vendor cycle, we typically expect the cash to be going down in some way, shape, or form. Most small businesses, often time, will do electronic transfers so that they can basically use the bank feeds to create their expenses cycle, paying their telephone utilities and so on automatically. And that's great. The larger the business gets, it's more likely that they might use, like, an accrual system entering bills, which means you have an account's payable and that makes it a little bit more complicated to construct with the bank feeds. But then on the customer or revenue side of things, when you're looking at the checking account, many businesses often have to deviate from just constructing their books from deposits that come through the bank feeds because they have, like, a cash register situation they have to deal with or they have to send out invoices, which kind of puts more complexity into the situation, which we talked about in prior presentations. With the credit cards, you're not really talking about the revenue cycle. We're really only talking about kind of a way that you can deal with the vendor or expenses cycle and the credit cards themselves are, of course, a form of electronic transfer going through the financial statements and therefore it's likely that many small businesses will, if they're using the credit card, to pay off their bills are just going to be paying off those bills using the bank feeds. In other words, we're not going to enter the transaction into the credit card as we make the credit card payment in our books to match it to the bank feeds. Once they clear the bank feeds, which is a full-service kind of system, but instead, we're just going to say we're going to pay it with the credit card, we're not going to record it, wait till it clears the bank, which will happen with a credit card company in one to three days, typically quite quickly, and then record it in our system with the use of the credit card so the expense will be impacted in the same way as if we paid it with an electronic transfer on the bank feeds, but instead of decreasing the check-in account, we're going to be increasing a credit card account. So we'll look at some examples for that. The only other kind of tricky thing with a credit card is that then you've got payments to pay down the credit card, hopefully monthly, so that we don't have to deal with the interest on the credit card. So if you pay off everything with a credit card, if you pay for all your expenses with a credit card, you collect the points and all the stuff that the credit card gives you, and you avoid the interest and penalty charges by paying the credit card each month, that could be a good system oftentimes, and it might raise your credit score, it might allow you to get points from the credit card company and so on and so forth, and it'll still allow you to minimize or avoid interest. So that could be a good system to do, but then you've got this inter-bank feed transaction coming from the bank to the credit card. We'll talk about those in a future presentation. So those are easy to deal with, but they're a little bit tricky. You can see they're trying to pair it automatically with QuickBooks here, so we'll talk more about that in a future presentation. All right, so let's just categorize these. We're in bank feed limbo, just like we would be if these were coming in from the bank feeds. We don't have enough information for QuickBooks to pull it in from here, bank feed limbo to the promised land, creating the financial statements. With this data, what does it need? It needs an account at least to assign it to. We can, of course, start to memorize those accounts. We can create rules in the same way. We do with a check-in account to make it more automated going forward, but we've got to give it that little push, that little bit of help, that little bit of love in order for it to be able to do that. Okay, so let's do it then. We'll go in. We also have to add a vendor, by the way. You want to add the vendors as we go. Okay, let's do this one. So we'll just add a few of these as we go. We'll just kind of say, all right, this one is the pharmacy. So I'm going to say, okay, let's just say it's going to be CVS Pharmacy and I'm just going to type that in here as the vendor, just like we did on the cash side of things, on the check-in account. Save it. It's trying to pick draws. That might be actually somewhat accurate because if I'm paying for pharmacy pills, then maybe I'm paying that with my business credit card and it's like a personal transaction. So you have the same kind of issue that you do with the check-in account in that case. Normally, you don't want to do that. You'd like to have two credit cards, one for personal, one for business, but if you do mix them up and you say, okay, what if that's a personal charge? It shouldn't be on the business side of things. Then let's practice that and say I'm going to put it to draws instead of an expense account. So the thing you should do is pay it with another credit card, but if you can't, you could say, okay, I'm just going to make it go to draws and that way it won't hit the income statement. So that's another format that you could do. And then of course you could create a rule for it. Let's create a rule and I'm going to say it's going to be a money out rule. I'm going to say it has the text. I like using the text to be more specific and it has CVS. I'll draw it from the memo. CVS slash pharmacy in it. Boom. If it has that, then apply the rule. It's going to be an expense type of transaction. That's the form that it's going to be used, an expense type of account. Category is going to be draws. It's actually an equity type of account that's going to be hit. And then this is the payee and I'm not going to add it automatically. Maybe I'll do that later, but I like to turn it off at the start so I can double check that my rules are being applied in the format. I think they should be before I pull them over to the promised land of the financial statements. So something's not quite right. I don't think it likes this dash maybe. And so let's save it again. Okay. So there you have it. So the rule has been created. I have created another rule which is over here in the rules area. This being a credit card rule. So that looks good. If I go to my financial statements and I run the balance sheet running it and scrolling down instead of the checking account going down we have instead a liability. The bad thing going up. Now this has a beginning balance in it. I'm going to take that beginning balance just so you can see what is happening as we go here. So I'm going to go in here and say I'm going to go into that beginning balance and I'm going to remove it just so we can start at zero so you can see what happens when I put the expenses in here instead of having that balance in it at the start. So I'm going to go ahead and just delete this. I'm going to say more delete and then we'll deal with that beginning balance issue like we talked about in the prior presentation when I do the first kind of credit card reconciliation. Now I didn't actually record it I just created the rule and then apply it so I'm going to go back on over and I'm going to apply it so there's the rule. Rules, rules, rules. The rule has been applied. So now I'm going to add it and now let's go back on over to the balance sheet refresh it again and just see that one transaction in the credit card account. There's the transaction. It's increasing the liability account so it's a positive like bad thing. Notice it increased it with a expense form which might look unusual because you like expense forms usually deal with a decrease to the checking account but that's the form that QuickBooks is using and it's just assigning it instead of a checking account to the credit card so you can think of the expense form as one that can be used for the credit card or the checking account. It's like a check without the check number usually for a checking account form but you can also use it as basically a credit card payment increase in the liability by just assigning it to the credit card account and then draws down below. So note the other side did not go to the income statement because we said we bought something for the personal side therefore it went into draws, a contra equity account. So there it is on the draws scrolling back up. That looks good. Notice that if it was a personal thing and you put it as an expense then your income statement over here would have overstated your expenses understating net income which is actually good for taxes because then you would have less taxable income likely and pays less taxes but of course it would be incorrect and if you have a large dollar amount in like pharmaceuticals and you do accounting then the IRS might say why is that? Or if you have a big amount in miscellaneous. Also note that if you have someone else doing your bookkeeping or if you're doing bookkeeping for someone else it can be very difficult sometimes to determine whether something is personal versus business but if you're doing your own books it might be a little bit easier to do that. Also note you might want to use QuickBooks for your own personal accounting which works great. It would be best to have two files and still have two credit card accounts and have two checking accounts personal versus business but if you have a small business and you just have a schedule C business it's possible to run one QuickBooks file and use the class tracking. Turn on class tracking which means you'd have to assign a class to every transaction and then you could run a profit and loss report business and personal. So remember the way you could turn on class tracking if you want to practice that we have whole courses on class tracking as you hit the cog up top you go to the account settings and it's in the advanced over here and then you've got your class tracking then you've got your class tracking it was right there hold on a second then you've got where I just saw it I swear there it is it's under the category section so you can turn on your class tracking if you do that you're going to have to assign a class to every transaction so it's a little bit tedious but you might be able to memorize that transaction and you can always go back in there fix transactions if some of them were not classified so it's something that you might want it might be interested in checking out so there's that alright let's go back then to where my profit and loss got messed up so this is going from 010122 to 123122 run it and let's go back and do another one so then let's say that these are all for supplies for Costco supplies my Costco supplies so I'm going to say this is going to be Costco I'll just say Costco I don't want the WWW that doesn't I don't like that I'm just going to say Costco save it and then we're going to say this is going to be a vendor draws then the category I'm going to make the category be supplies I don't think I have a supplies yet so I'm going to create an expense account as we go on the fly as we're flying and so we're going to say it's hard to make stuff when you're flying but I'm going to do it right here because we're flying and I'm going I don't really care about this other account I'm going to put it over here and it's going to call it supplies expense boom save it now Costco is one of those areas where you might buy like supplies most of the time but then you might buy equipment sometime so you might want to set up some rules that are a little bit more restrictive I won't get too detailed into this now but just to give you an idea if I create my rules over here we might say okay this is Costco rule you might try to differentiate the rule for a dollar amount under say five thousand dollars or something versus a dollar amount over five thousand because if it's over five thousand or a thousand or whatever number you think is appropriate it's likely that it's going to be equipment as opposed to a supplies expense so it's going to be a money out rule for the visa and you might say that I want all of them to apply let's go from the text so in the text I'm going to do the normal kind of thing where it should say Costco in it somewhere I'm not sure I want the www dot but Costco and then if you have that number rule you might also say look if it's has an amount that is less than like a thousand or two thousand or whatever you think is appropriate then I want you to apply the rule if it's over two thousand I don't want you to apply the rule because I want to double check it and see that if I need to include it as equipment as opposed to supplies it's because if you buy like a fifty thousand dollar piece of equipment for cash or something and you just expense it as supplies it's going to start again looking bad on your tax return because the IRS is going to say you should have put it on the books as an asset and depreciated it you over-expensed it and you might and so it could be a red flag in that case so you might put a dollar we'll talk more about those rules though later so I'm going to close I'm going to X that out it's going to be from an expense form I'm going to say okay everything looks movie B to the end B to the end baby let's go up top and then I'm going to sort the rules and say I want to see the ones that are recognized I recognize so there they are so I look they look good so I'm just going to select all of them I'm holding down shift and I'll select the top and bottom boom boom and then accept they have been accepted let's go on over to the balance sheet and K-passo what and what happened what happened let's go down and check it out I'll show you what happened in the credit card if I go into the credit card now we've got these increases from of course the Costco's that are going in they're all with expense forms so QuickBooks is using an expense form instead of like creating another form that they're going to use specific to the credit card because it's like the same thing we're just assigning it to the credit card another financial kind of account although instead of asset a liability account back the other side let's go into the income statement as would be expected into the to the supplies expense that we created down here boom shock a locker just like just like the bank feeds except for instead of cash going down the credit card is going up do I have any others that we need to deal with here let's go back to the first tab and check it out I'm going to remove the rule and so let's do this board of accountancy so I'll say okay let's do that one just say this is like I'm going to say board of accountancy board of accountancy and then we'll say like this is going to be license or something do's and subscriptions or something like that let's say so I'm going to say it's going to be an expense it's going to be do's and subscriptions boom let's do that and save it and I can create a rule for that if I wanted to let's do it because why in the world wouldn't we huh huh tell me that let's see dude okay so then rule has been applied boom and then let's add it bam check it balance sheet running it running scrolling down on the the credit card credit card let's see the credit that has been happening and so there's that one there it is the other side going to do's and subscription we made the account on the fly we were flying and we made it in the air in the air we made it on the fly made it on top of the flies wings made the thing on flies on a fly and I swatted the fly what are you talking about just do the where to do there it is alright so there let's go back on up so that looks good so now we've got this one we've got this this issue with the credit card which might not tie out at this point in time to what's on my credit card statement due to that beginning balance issue that we're going to have to deal with so we've got that issue and then we've got the payments that are going to happen later that are coming that are going to be enter bank feed accounts payments coming out of the checking account and going to the credit card account and they're kind of trying to match those up we'll talk about those and a little bit more detail in future presentations