 QuickBooks Online 2024. PayPal, bank feeds, data input and transfers. Get ready and some coffee because we're going to be able to generate financials on call with QuickBooks Online 2024. First, a word from our sponsor. Yeah, actually, we're sponsoring ourselves on this one because apparently the merchandisers, they don't want to be seen with us. But that's okay whatever because our merchandise is better than their stupid stuff anyways. Like our crunchy numbers is my cardio product line. Now I'm not saying that subscribing to this channel crunchy numbers with us will make you thin fit and healthy or anything. However, it does seem like it worked for her. Just saying. So yeah, subscribe hit the bell thing and buy some merchandise so you can make the world a better place by sharing your accounting instruction exercise routine. If you would like a commercial free experience, consider subscribing to our website at accounting instruction.com or accounting instruction.thinkific.com. Here we are in our QuickBooks Online Bank Feed Practice file. We sit up in a prior presentation opening the major financial statement reports as we do every time the report's on the left hand side within the favorites. We're going to be right clicking on that balance sheet to open a link in a new tab, right click on the profit and loss to open a link in a new tab. And then we'll do the same with the trustee TB the trial balance. If you don't have that trial balance in the favorites, you can search for it. Let's tab to the right close up the hamburger and then we'll change the range up top. We're going from 0101242033124 selecting the drop down. We want to see it on a month by month basis. Run it and then we'll tab to the right and repeat closing the hamburger, changing the range 010124 tab 033124 tab drop down for the months and run it to refresh it one more time. Uno vase mas por favor and we'll run it again 010124 tab 033124 tab selecting the drop down months, run it to refresh it. Let's go back to the balance sheet. We've been thinking about, of course, our bank feed starting with the checking account. The first thing people think of when they connect the bank feeds, but we noted that you can also connect the credit card. So then we went to the credit card and you can connect savings accounts and possibly even brokerage accounts if they're with your bank, for example, but we this time wanted to connect the PayPal account. The PayPal account, you could connect basically using an application which might give you some more versatility. We discussed a little bit more in the prior presentation or possibly just connect with the bank feeds where you might not have as much of the breakout of the detail if you have transactions say with fees, for example, but I kind of trusted a little bit more at the same at the same time because it's just a normal kind of bank feed connection. And that's what we in essence did. So it's going to act for us. I'm going to go to the first tab to the transactions in a similar fashion as though we had just another checking account. So now we have our PayPal acting like another checking account because we got money going in and out of it. And we chose to put the PayPal account in place instead of just waiting till say, for example, deposits clear the bank into the checking account, which would be an easier system to not connect to the PayPal. If that's what all we were using it for, we chose to actually add PayPal because we had multiple people paying us within PayPal. And we wanted to add that customer detail or platform detail into our system. And because we're using it to pay expenses, which means we're using it more like a checking account. Alright, so here were our transactions down below. Now if we're paying out of PayPal, then it's just like any other kind of checking account if you're doing that. So for example, this one we paid to outback Steakhouse, which I'm not sure if they accept PayPal or not. But if they did, then we can pay them we have the similar situation where it could go to an expense form if it was for an expense like meals and entertainment. But if it was for personal use, you might be using your PayPal and say, Oh, man, I use some of it for personal, some of it for business, just the same problem we had with the checking account and with the credit card account. If it was for personal use, we might assign it then to the the draws account. So let's practice that we'll say it goes to draws, draws. So this is one method that you could use again, you want to try to separate your accounts. So you're using PayPal just for personal versus business. But there's only one PayPal does some unique things. So possibly you use it for both and you have this situation where you'd have to break out between personal and business. The two strategies we have to do that one, when you have a personal item, you put it to draws. So it doesn't hit the income statement at all. Or two, you put it into a expense category, but break it out by class. And the class tracking would only be there if you have might not be there on the lower versions of QuickBooks. But the class tracking will break out the income statement by column, which could be a way to do this. If you have a small business, just doing the bookkeeping for tax purposes on a schedule C, for example, the schedule C, in essence, only being an income statement, rather than needing to track kind of all the balance sheet accounts possibly. So we have the owner draws here, we're going to say an outback steakhouse. If I hadn't set up the vendor, I can copy the vendor in place. We do want to be adding the vendor as we go. If this was a repeat process, then we can create a rule with it just as we saw with the normal with the normal transactions in the checking account, we won't make a rule this time. And then we could simply confirm it. So let's go back on over to the balance sheet and check that one out running it. And now we've got a PayPal transactions. And if I go into the PayPal transaction, same kind of thing happening here, we've got the 230 PayPal, it was recorded with an expense form because it's being treated like a decrease to the checking account that we recorded through the bank feeds. And so that is that. And then the other side, instead of going to the income statement, we put it into the draws because we imagined it was for personal use. So we put it in into here. So there's the other side outback steakhouse, we've been visiting there a lot for our stakes, apparently, I don't know, I'm not advertising for them or anything. It's just the first thing that comes to mind. I'm hungry. So I'm going to say, okay, then we have if the profit and loss, we didn't have anything in here. If we did post it to the profit and loss and it was personal, we might change this from months to classes. And we saw this in prior presentations where you can break out every transaction, assigning it to P for personal or B for business, for example, if you did that, instead of having a not specified class where you don't have a class assigned to a transaction, I would think you would want to assign every transaction to a class. And then the not specified ones will be a double check, which means you haven't thought about whether or not to assign it to a class and you can drill down on those forms and assign them to the proper class. So that's the other way. So you could have put it to like meals and entertainment in here breaking it out by personal or business. Sorry, right? So I'm going to go back to months here. So again, when you talk about that kind of thing with a bookkeeper, they might cringe because they get scared because, you know, because it'd be best if you could separate everything out perfectly, but sometimes you can't. All right, let's go back on over to the pay to the PayPal transactions. Then we had these amounts, which were the payments of PayPal. But first, let's look at these. We also had these three that were saying came in from a platform. So you two paid us and then we had another platform paid us and then we're saying that we got money from our website. Now again, if we were just using QuickBooks to collect those payments and then taking those amounts and depositing them from PayPal into our bank as soon as we get them, we might just wait until they clear the bank and not even connect PayPal. And then when I see them coming in on this side from PayPal, just record them as income. But as I get as things get more complicated, if I have more things paying me through PayPal, it might be useful to connect it so that I can then see where they are coming from with the bank detail if they are electronic transfers. So for example, this one, let's do the YouTube one first, we'll say YouTube. And it would be the same kind of process. We have a we have a YouTube up top that's already been categorized as a customer. So we will keep that the category it's going to is YouTube income. Normally, I wouldn't make an income account by customer but YouTube's kind of an exception because we're doing gig work and being paid by an entire platform, right? So you might make a whole separate income account by customer as well. So we'll do that. And then again, you can save this transaction and make a rule for it if you wanted to. But I'm not going to hear actually this one already had a rule applied to it. So the rules being applied. So I'm just going to confirm it. And so that one has been put in place, we can do the same thing with the website one. So let's say this was our website, you know, that is paying us through PayPal, then I might put of a customer, which I might call our website says out website, but it should be our website, we're going to say tab, I'm just going to add that so I have something to tie it to. Even though it's not really a customer, that's just saying that it's coming from our platform. But that can add information to the customer area which or which could help us to sort our data. So instead of just putting it into services, I'm going to make a new account and say that this is going to be income from that platform. So I'm going to call it an income account. We'll make it a other primary income. And I'm going to call it our platform, say our platform, which is a generic and then income, right, a generic income account for all the sales that are happening from our website, or so we're going to say save. And then I could of course create a rule for that. So I can say rule. And then our platform money in we can apply it to PayPal or to all of the accounts. I'll just apply it to PayPal here. Description I like to say bank text because it's more detailed, and then contains and then out website. I'm going to say that's the one we want. How many is it going to apply to just the one right now? Okay, it's going to be the transaction type deposit. There it is. There it is. Let's go ahead and save it. Then the rule is applied. So I'm going to click on it and say that looks good. Let's confirm. And then we can do the same thing for the online platform. This is another platform that we are imagining that we have here. So we're going to say the other platform I'll copy the memo information for the customer tab add. I'm going to make another account for it, which will be an income type of account. So it's going to be income. And I'll say it's other primary income. And then I'm going to say it's going to be online platform income. And then save it. We could make a rule for that creating a rule. It's a money in rule. I'm going to make it a bank text containing online platform tested. One is applied. Looks like the data is good. Save it. And then I'm going to say that rule is good been applied confirm. So let's look at those now. If I go to the balance sheet, we're going to say okay. And then in PayPal, we have these transactions taking place. Let's put the end date to three. And so we can see all the data in there. So we have the deposit forms that are taking place. And then we have this one expense that we have done thus far. And then on the other side on the income statement, I was able to break out the detail. So I refreshed the page. So now we have our income accounts for for the website, YouTube and the online platform. Notice I named the income account by platform. We don't normally name income accounts by customer. But if you're doing gig work and you're just getting paid by platforms, that kind of makes sense. Because then you can basically categorize your income by the major platforms that you're working with number one. And number two, because you're recording them with the deposit form through the bank feeds, you're not going to have the added detail of a sub ledger that can break out the income by customer, right? Because you didn't use the sales forms, invoices, and the sales receipts. So in that case, it kind of makes sense to make an income aligned by an essence customer or platform. So that's what we have there. Also note that by using PayPal, I was able to see clearly through the bank feed data, which platform was paying us at any given time. Whereas if I wait till it cleared the bank to the checking account and I didn't connect to PayPal, then I would I might not know which platform it came from unless I transfer the deposits one at a time. So in that case, I might, I would be required only to have one account called, you know, online income right from PayPal, right or PayPal income, which would be all the income through the sources that are paying me through PayPal. So then let's go to the first tab again. Now we've got these transfers. So these are connecting these are like two accounts now that are both connected to the bank PayPal and the checking account. And we have this this issue that we have a transaction that's going from PayPal to the checking account. And so the question is which side should I record that transaction on because they're impacting two accounts that are connected to the bank feeds. So you can see here that it found those it sees it and says it's paired. It's paired on this side. It's paired on the on on the checking account side, we could see it is paired paired is different than match match means that they see a transaction that has already been recorded. It's already been pulled into the promised land or was created by ourselves and didn't go through the bank feeds. And it's already part of the financial statements in other words, and it's just verifying or matching meaning it's not going to record anything new or it's going to record the next thing in the series of the cycle of processes. But the when it says it's paired, it means that it's it's connected to another bank feed transaction that has not yet been pulled into the promised land. So if I can go to either side then the best practice probably we would be to check each side I could say okay there's that transaction here here it is on the other side right and then add it you can I usually add it from the checking account because that's the way I normally see the items coming through. Now this pulls up the question though of if I hit the plus button notice that if money is going into the checking account you would think I would use a deposit form right because that would make sense if I go to the balance sheet and I was going okay the checking account is going to go up if I go into the checking account and I'm going to change the date to January the increases in the checking account happen with deposits so you would think I'd have a deposit form however on the other side of things if I used a deposit form from the checking account side and I looked at the PayPal side because this is basically a checking account then I would have a deposit form with a decrease right that's why we don't use the deposit form even though the financials would be correct the journal entry would be correct on the other hand you could say well why don't I use an expense form because if I use an expense form from the PayPal side that would kind of look correct right because the expense form would be decreasing PayPal but if I go into the deposit side of things then the expense form doesn't look quite right because the expense form would be an increase instead of a decrease that messes up my filtering options up top I want to be able to filter by transaction type deposits should increase expenses should decrease so although the transaction would be correct in terms of the accounts impacted we using either the expense form or the deposit form we're typically going to use a transfer form now note that sometimes like QuickBooks is getting better and better at not assigning a transaction to a transfer form from the bank feeds if it's not an interbank feed transaction between two bank accounts but sometimes it still does because sometimes the description has transfer in it for whatever reason and therefore QuickBooks kind of defaults to try to make a transfer form which isn't the proper form typically so just be be careful of that you you want to transfer only when it's actually a transfer between the two accounts basically and it will be paired usually if that were the case now if it was connected to a credit card account you have the same issue and could still use transfer in theory but QuickBooks makes another thing called pay down credit card which we saw with the credit card same concept same idea if you if you used an expense form it wouldn't look right on the credit card side of things in the transaction detail because the expense form is what is being used to record the purchases of items like supplies and whatnot therefore instead of using transfer they want to use the pay down credit card so so that's so these two are basically doing the same thing solving this problem of the sorting issue with the transaction detail for interbank feed transactions and then bank feed transactions with credit cards let me just show you what would happen if i went to this side and i didn't use that it's paired notice that this one is paired and it's using a transfer that is correct but let me just show you what would happen if we said well i'm going to do it with a category which means it's going to make an expense form it's a decrease so i'm going to say let's do the category it'll be a decrease there and then i could add the vendor which would be the you know the checking account and then and then let's just see the different methods and see why this is an issue just so you could explain this to people so we're going to say all right let's confirm that 400 as it will hold on a sec i didn't assign an account it's going into the bank account the other side's going into the the bank account and this is the paypal account okay so there we have it let's go and confirm it now okay and so then if i go into my bank account on this side i think it recorded it on this side uh no it says if i go into the bank account side now uh okay hold on i assigned it to the wrong account let's go back to paypal and just note if i categorize it here if i go to the categories and i look at that one you're gonna say okay 400 it went to a bank charge when i wanted it to go to the bank account so i could undo it or i can go into this transaction let's go into that one and then say i wanted to go not to the bank charge but to the checking checking account okay so there we have it now it's going to the checking account now let's save and close it okay and so now i'm going to go back to the for review category go into the checking account and then notice this 400 is no longer paired it now says match why does it say match instead of paired now because the other side of the transaction has been entered and is now part of the of our financial statements and this one now would not be recording anything new but simply matching to what we did on the other side so i could say okay match that and so now if i go to my balance sheet i think this one happened in february on the paypal in february we then have this expense form so the expense form the other side goes to the checking that looks kind of normal because it's a decrease and then if i go to the other side in february this is where it looks kind of funny because now we have this 400 here it's an increase but it's an expense form that messes up my sorting right if i want to filter by transaction type for the things that are increasing then i shouldn't have to filter by the expense form that'll mess things up that's the point even though the transaction is correct the other way you might see this just to just to show you the other side you could say okay well what if i was on the checking account side and i see it here it would be a deposit right so if i go into it instead of pairing it instead of recording it as a transfer if i went to the category field and recorded it as a deposit it would be a deposit and then the other side's going to go to paypal paypal and so boom and so now let's save this one it'll record it as a deposit the other side should be paired or matched on the other side so i'm going to say confirm just to show you this is kind of what not to do but i just want to show you these three why it does it this way and it's kind of nice over here we can also see why it matches now instead of having a paired thing it says it has now matched it so i'm going to say okay let's go into that one and it matched it because the other one has been added let's go ahead and match it so that's good if i go into the balance sheet and run it so when was that one as of i can't remember what it was for what date was that one i think they're they were all in february let's do february checking account february so that one was a there's paypal here it is 480 that one looks right that it's a deposit so that's good on that side but if i go to the paypal side of things then then it doesn't look quite right on the paypal because now you have a deposit which is a decrease and deposits should increase so one way you might think of it if you look at it from the perspective of the checking account then you know you might try to make the checking account like correct because that's the one that's going to have the most detail although paypal could get quite detailed if you use it a lot as well but that's the reason that you use the paired form which is a transfer so instead of doing that we do it this way which is paired notice when i confirm these two it will confirm them on both on both sides of the transaction it should notice over here it doesn't show them as paired but you that's because i kind of tinkered with it with those other two but if i add these two let's go ahead and add them both at the same time and then confirm boom and then i'm going to do you want to use the same category for all expense i'm going to say let's go to the checking account and those two didn't get confirmed i thought they were paired let me refresh the screen or let me go back and see here and categories so we can check those out that were paired these transactions i put it to bank charges again hold on let's undo that and undo that let's go back to this first one and let's go and check them out again so i they should have they were correct the first time but then i tinkered with it and messed it up let's go to record as a transfer and then it says paired transfer details so pay pal so i think that is what we want to see okay and then this one is paired as well so if i go into it record as transfer paired let's confirm and then if i go into the checking account then on this side it recorded the other side at the same time so of course i did that totally on purpose so that we can demonstrate how you can then go into the categorized field and undo it or change it that was intentional in case you were wondering let's go to the balance sheet and then check it out again and go into the checking account so now we have them in there as the transfers so now it's a transfer so when i sort with the filters if i want to look at increases or decreases i would have to include the transfer right because the transfer could be a transfer in or it could be a transfer out but at least it doesn't look funny that i have like an expense form going the wrong way or a deposit form going the wrong way and then if i go into the the pay pal side of things same thing those two are in there if i got them hopefully correct as a transfer right so that and so again that that's why we use the transfer so that it so that it doesn't look funny on the transaction detail now again if i go to the first tab notice quickbooks is getting a lot better at being able to identify whether something should be paired with the transfer as it was correctly done when we first did it before i tinkered with it and kind of messed up uh quickbooks thing but you always kind of want to check each side of the transaction that that they're linked to to make sure that they're they're properly paired and the and the right thing is being done also note quickbooks is getting a lot better at not using the transfer form when it isn't a transfer between two checking accounts like it used to use that transfer form sometimes which messes things up so so uh so it's getting better at that when it recommends the account that it should go to but again you still want to be careful of that if quickbooks is recommending that something is a transfer make sure that it's properly should be a transfer in that it's going from one bank feed account usually to another bank feed account in which case you can confirm that it's on both sides of the bank feed and then confirm that the two accounts have been uh recorded when you when you pair them all right so then uh and record them with the parent so i'm going to go to the balance sheet this is where we are at this point in time so hopefully i got that paypal correct and so this is where we stand this is where we stand on the p&l the income statement the profit and loss let's run it to refresh it i don't think we did anything here because we actually know we recorded a transaction over here didn't we like an expense or something uh no no it was out back so that was on the balance sheet too as a draw and then we have our trial balance so if you're following along then if your numbers tell to these numbers great if not it might be a date range issue and you can change the date range if that is the issue and uh then drill down to the source document possibly changing the date on the source document if you need to something that's great to do in a practice problem but be careful doing that in practice