 QuickBooks Online 2023 bank feeds matching invoice to bank feed deposit. Get ready to start moving on up with QuickBooks Online 2023. Here we are in our bank feeds 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 incognito window or another browser. If using Google Chrome, you can open incognito by selecting the three dots in the browser. Incognito window typing into the search engine. QuickBooks Online Test Drive. 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. 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. If you want to toggle between the two, go to the cog up top and switch the view down below. We're going to be opening up some tabs, duplicating tabs I should say to put reports in by right-clicking the tab up top to duplicate this. We do this every time so I'm doing it a little bit more quickly, right-click, duplicate it, going back to the tab to the middle. We're going to open up the balance sheet by going to the reports on the left and then the balance sheet is one of the favorites. It's everyone's favorite, everyone's favorite. If it's not your favorite, you have a problem. Sample company, the reports are located in the business overview and then the reports on the left-hand side. Going back on over on the income statement tab into the right, we're on the reports on the left. Let's open up the P to the L, the profit to the loss, the income statement, close up the boogie and change the range. I'm going from 010122 tab, 123122 tab, run it for the refreshing it and then tab it to the middle. Close up the hand boogie and change the range once again from 010122 tab, 123122 and run it to refresh it. Let's now open the bank feeds, which we do every time. In the first tab, banking on the left, banking up top. That's where the bank feeds are. If you're in the business view, by the way, the bank feeds are located in the bookkeeping and then the transactions and then the bank transactions. So that's that. Let's go on back over. That's the setup process that we do every time. We're focusing now on the deposit side of things, recording income, taking a look at our float chart over here to see the options. Now, we've been thinking about the revenue cycle now deposits being the end result, hopefully at the end of whatever our revenue cycle is. We talked about the easiest method and it will be dependent on the type of industry we're in where we just wait till something clears the bank. We recorded as income with a deposit form. Then we talked a little bit about sales tax, which kind of muddies up the situation possibly. And then now we're going to be branching out a bit. So notice that if you have a different kind of industry at a cash register, you would generally have to use a sales receipt still on a cash-based system, but more complex than just waiting till something clears the bank to make the deposit. And then we have an accrual system where you're going to have to invoice the client. Now remember, you can't just pick. You can't just be like, I'm just not going to do that. I'm just going to wait till it clears the bank. Normally, it's going to be dependent on the industry you're in. If you're in a kind of industry like landscaping or bookkeeping or a law firm that you have to do the work first and then invoice or bill the client, that's probably the way you're going to have to do it if you want to be in that industry, right? So now we're going to have to say, okay, if I invoice the client, what does that do? Increases accounts receivable. Hopefully they're going to pay us the invoice in the future. The other side's going to be going to revenue. And then we're going to have to collect on the invoice. Now, when we collect on the invoice, we could we generally use the receive payment option. And we could use that to deposit it directly into the checking account at that point in time. But oftentimes we might set up a system to put it into the clearing account of payments to be deposited or undeposited funds so that we can then group the deposits that we're receiving in the same format in our system so that when we make the deposit, it matches out to what is on the bank statement so that we can do the bank fact reconciliations, which we might possibly be doing in tandem with or in part or the bank feeds helping us to do the bank reconciliation, matching out the deposit to what we entered in our side. Now, this second step is often the one that causes the confusion because if you get paid by like a check or an electronic transfer, you might be able to just deposit this directly into the checking account and that should match what's on the bank statement. But if you get paid by credit cards or you get paid by cash, then it's likely that the credit card company or whatever intermediary that you are using will start to group your deposits in such a way that they're going to put it in your bank account in some kind of lump sum method instead of transaction by transaction. In that case, or if you get cash, then you're going to group whatever cash you have at the end of the day and deposit that into the bank as a group, not as like individual $5 sales or something like that. And that means when it shows on the bank statement or comes through with the bank feeds, it's going to be in there as a grouped amount. And if you're entering the transactions into our checking account with just a single $5, $5, $5 amount, for example, it's not going to match up and we're going to have to reconcile by basically doing some a lot of math to reconcile. We're going to have to tie everything out. We don't want to do that. That's why you might use like a clearing account at this second step, which we'll take a look at a little bit more in depth as we go. So you can see there's basically three nodes in the general process. If we think about the full process, you enter the invoice, sales, accounts receivable goes up. You have received the payment, accounts receivable goes down and we put it not yet into the clearing account, but let's think we put it into the checking account but instead into the clearing account and then we take it out of the clearing account and make the deposit. You've got kind of three steps. Where do the bank feeds fit in then? You can't use the bank feeds to make the invoice because there's no cash impacted with the invoice. So the invoice has to be made on its own in the system, which is often what a lot of businesses use QuickBooks primarily for is the invoicing. Small businesses are trying to generate revenue. They got to send out those invoices. QuickBooks has a good way to send the invoices and track the invoices. So then you can imagine that we could connect or try to connect the invoice to, I mean, sorry, the bank feed to the invoice, meaning we could invoice and let's say that they then pay us with an electronic transfer or something on the invoice or something like that. And then we try to say, okay, now it's cleared the bank and I'm just going to connect the bank feed to the invoice and see if QuickBooks can then record the decrease in the accounts receivable and the increase ultimately in the checking account, but they might do it in a two-step process. They might then, if you match out a deposit directly to the invoice, they might record the received payment and then the deposit, right? So that's one way we can do it. That's what we'll test out here. You can also imagine a system where you had an invoice and then you record the received payment. When you get the received payment and that's going to increase the clearing account, let's say, and the other side is going to decrease the accounts receivable and then you try to connect the bank feeds, you wait till it clears the bank and connect it to the received payment, which would take it out of the clearing account and then deposit it into the checking account. And then of course, you can imagine that we on our end record the invoice, we record the received payment and we record the deposit, which is quite likely oftentimes to do the full invoicing process if you have to do invoicing depending on the type of industry you're in and then we would just use the bank feeds to double check the deposit. The bank feeds would be kind of like just our bank reconciliation, helping us out with our bank reconciliation. And then you have one final step, which you could imagine you have the invoice and then the received payment, but the received payment instead of depositing directly into, I'm sorry, instead of going into the clearing account, you deposit it directly into the bank account with the received payment. Then of course, you can connect the bank feed to the received payment, which once again is just matching because it would be just like you're just tying out to what got deposited. In that situation, what's going to happen is you're going to have an increase to the checking account, which is not from a deposit form. It's going to be from a received payment form, which kind of confuses things a little bit because it's kind of nice to see all your detail in the checking account, all the increases as deposits or possibly transfers. If you record received payments in there as increases, then you're going to have them as increases. So in other words, if I go to my detail for my balance sheet over here and I go to my checking account, all the increases in the checking account are deposits. I can filter by deposit and see the increases. But if I record the received payments as increases to the checking account, then I'm going to have deposits and receive payments that could possibly be increases to the checking account. Okay, so let's do this one at a time just so we can see your different options and then you could figure out which one's best for you. We're going to start with the first option. We create an invoice and then we wait till the payment happens, wait till the payment clears the bank and try to connect the cleared deposit with the bank feeds to the invoice. And that'll record ultimately, again, the decrease in the accounts receivable and increase in the checking account. Okay, so let's do that. I'm going to go to the first tab to do that. I'm going to use, let's say we're going to use this $510 amount. So I'm just going to pretend that we're going to make the invoice first before this date. And then we're going to say that it clears the bank afterwards. So this is what I'm going to tie out to. But I'm going to imagine the series of events would happen. I make the invoice first, right? So I'm going to make an invoice. And let's say this is going to be for, let's say customer 3. Let's say another creative name, customer 3. These people are all related. Customer 3 comes in. And then we're going to say this is going to happen on 1005, let's say 22. And let's say that the amount was... If you deal with... Let's not get involved with the sales tax and stuff. Obviously, if you have inventory and whatnot, then using the invoice will allow you to enter the product, which can help you to... And the items help you to calculate the sales tax and the tracking of the inventory if you need to. But I'm just going to do a service item here. Let's just say ours. And let's say it was $510. It's not taxable. So there it is. So this should just be increasing. Then with an invoice, accounts receivable. The other side is going to go to the revenue account. And so let me just... Does that make sense? I think so. $510, that was the amount. All right, let's... I'll change it if it wasn't. Was $510 the amount, people? Can you remember? $510, I think is the amount. All right, let's save it and close it. And then we're going to go back on over. Let's just check it right here. $510, yeah, $510. So see how it found the match already? And notice that it has very little to connect that match to, because if it's trying to tie to an invoice, it has the dollar amount and it has the date. And it might have some information in the memo that would indicate who the customer is, but it might not be able to use that information to really tie out because it's a memo or bank transaction detail as opposed to the information for the actual customer. So that's neat that it kind of did that. But before we do it, let's just take a look at what happened to the balance sheet. So if I go to my balance sheet, obviously accounts receivable has gone up. So there's the $510 here. The other side went to the sales somewhere. Somewhere in the sales. Did it go sale of product? No, it's not in there. I have to refresh it. That's why. Idiot. $510. Calm down. Calm down. I was a little tired. Need my coffee. And then if I go to the first tab, then we can also see this in a sub ledger for accounts receivable. If I go to the tab to the right, right click it and duplicate it. And then we could see the sub ledgers. If I go to the reports on the left-hand side and we can track who owes us the money, so I'm going to go down to who owes you money. So let's go to the accounts receivable aging here, or we could choose that one. That's fine. What's wrong with that one? So there we have it. So now we've got our list of customers. That adds up to 701 is the idea. And now we're tracking the 701 in a sub ledger. Obviously internally, we would track it internally. So if I go to the first tab and I scroll down to my sales area, I can go into my customers. And I could sort my customers by those with open invoices, except these are only 365 days. So that's kind of annoying. I'm working in the past. So I'll just go into customer three here. And so there is our overdue invoice. So the next thing we would expect to happen is we're going to get the payment from the customer. And so that's where the bank feeds come into play. So then the question is, okay, I've done this first step here. And by the way, you can also check your open invoices by going to the sales and then the all sales tab. And then check out your invoices here. And they've got this little filter thing, open invoices this way. So you can click that on that. And then your open invoices are down here. There's your invoice. If you're in the other view, by the way, the business view that is located in the get paid and pay area. It's in the customers. There's the customers. And then the other thing is located a little bit differently in bookkeeping for some odd reason, transactions up top, sales transactions. So you can sort your invoices that way if you so choose. Now, so that means that we've done this part. Accounts receivable went up and we can track who owes us the money. So clearly at this point we might want to be sending out like statements trying to collect on the money because we want to actually get the money we got. And then when they pay us, however they pay us, normally you would think the next form would be recording the receive payment. So you can go to the receive payment. It's connected to the invoice. And then we would record the receive payment. When you record the receive payment, then you have the option of either putting it into the checking account or you can put it into the clearing account, which they call payments to deposit, which is similar to undeposited funds in the desktop version. So again, if you put it directly into the checking account here, then it's going to increase the checking account not with a deposit, but with a receive payment type of form in the detail, which isn't a big problem or anything, but that's the way it's going to happen. The other way you do it is you put it into undeposited or payments to deposit, which is a clearing account. And you might do that for a couple of reasons. One is that you might have multiple deposits from like a credit card company or something. And again, they're going to deposit into your checking account, not sale by sale, invoice by invoice, but rather they're going to group them together in some way. So you're going to want to make sure that you get the grouping correct on your end versus the grouping that comes through with the bank, right? And so if you have to do that, if you have that grouping situation, then it's not likely that you're going to be able to tie out your invoice directly to the deposit. Because like if I made an invoice and then I'm going to get multiple payments from like a credit card or some kind of platform that's going to group them together, then the deposit that's going to go into the bank that's going to come through the bank feeds is going to be comprised of multiple invoices. And so therefore it's not likely I can wait until it clears the bank and then the system's going to be able to tie out multiple deposits, a bigger number to those invoices that were made to comprise it. So in that case, you're going to be required then to use the payments to deposit and then make the deposit on your end so you can just match it to what's on the bank feeds helping you with the bank reconciliation. So you have that. If you only have an electronic transfer, then you could use it going directly into the checking account. But again, you got kind of that issue of having it in there as a received payment as opposed to deposit. Now I'm not going to record this. I'm going to say, do you want to leave without saving? I'm going to say yes. And then after we did that, if we deposited into the clearing account, then we could make the deposit. But instead of doing that, I'm going to imagine we waited until the payment cleared the bank from the customer and then I'm using the bank feeds to connect it to the invoice. So now I'm going to say, okay, they paid us. It came through the bank feeds. So I'm going to say, all right, let's go to my bank feeds and then banking and it came through the bank feeds now and they matched it out for us. So if I look at it, if I go into this, they said it found a match. And if it didn't find a match, you can go into the find a match area and look for the match. But it found the match and notice it found the match only based on the basically the dollar amount that we received. So, and possibly the date being somewhat close to that amount. So if it wasn't a match, then you can go to the first category and move forward and so on. But now it's going to be a match. So let's go ahead and match it. That's going to actually record a transaction now and let's see what it does. So if I go back to the balance sheet, that's not the balance sheet, run it. So now we should have a decrease to the accounts receivable. So if I go to the accounts receivable, we've got the payment. So there's the payment form that was recorded and it decreases accounts receivable. So if I go into that, we've got the payment form. See, right? It created the payment form for us, tied it to the bank feed because it matches of course. And then it put it directly into the checking account. So it did not do this middle step. It's not like it made this middle step, putting it into undeposited funds and then making a deposit. So it put it directly into the checking account using a received payment form. So if I go back on over, I close this out and I go back and I go to my checking account then I should have a received payment form here. So where did it go? Let's go. Let's go. There it is. So there's the payment form. So now notice it's an increase like a deposit but now I've got a payment. So if I wanted to filter by stuff over here and I say I want to see all the increases and filter then I can't just say, I just want to see the deposits now because I also have to pick up the payments forms which are going to be an increase as well which are right here. So I could say, okay, if I run just the increases so now you've got increases on the deposits and then you've got that one payment form right there. So if I go into that payment form it once again takes us back to the received payment. So then if I go into my sub ledger for the accounts receivable no impact on the income statement by the way on that transaction because we've recorded revenue when we made the invoice. If I run the AR so now we're back down to just customer one and two my AR sub ledger ties out to 191.25 that ties out to what's on the balance sheet and internally I can then track this information by going to my sales and then go into my customers and then if I take a look at customer number three we see the detail of the transaction. So now we've got the invoice the invoice is now if I go into it has been paid it's linked to the payment. So I can go into the payment this way and actually link or find the payment. So we've got that nice linkage and the tracking information that was recorded automatically from us connecting the bank feed to the invoice. So that's one method that we could use connecting the bank feeds which actually still record a transaction connecting it to the invoice. Next time we'll think about okay what if I connect to the bank feed to the receive payment form and then maybe we'll go to the deposit form and then we'll go up to doing a similar thing with the sales receipts up top. Alright.