 Zero accounting software 2023 bank feeds credit card bank feed data set up Get ready to become an accountant hero with zero 2023 here we are in our custom zero home page going into the company file We set up in a prior presentation that being the bank feed file We're gonna be duplicating some tabs to put the reports in as done every time first a word from our sponsor Well, actually, these are just items that we picked from the YouTube shopping affiliate program But that's actually good for you because these aren't things that were just given to us from some large Corporation which we don't even use in exchange for us selling them to you These are things that we actually researched purchase and use ourselves Here we have a Western digital WD elements 20 terabyte USB 3.0 desktop External hard drive we use as part of our backup system Noting that if you lower the number of terabytes of storage the price will lower dramatically as well When you're thinking about a backup system You usually think it about an online system or an external hard drive system like this or Ideally some combination between the two given you some redundancy You can also work directly from an external hard drive like this But there are some drawbacks to doing that one being if you use this as your primary drive you're working from It's no longer a backup drive and you're gonna need a backup system possibly another external hard drive and or some kind of cloud backup system and If you're working on something that takes up a lot of short-term memory a lot of RAM as you're working on it Such as video editing the external hard drive can slow up the system So you might want to come up with some kind of system where you download the project You're working on to your computer to your C drive or possibly to a solid-state drive, which is a much more expensive External hard drive as you do the work once the work is done Then save the project to an external hard drive such as this If you would like a commercial free experience consider subscribing to our website at accounting Instruction.com or accounting instruction dot think a thick dot com where we have many different courses You can purchase one at a time or have a subscription model given you access to all the courses Courses which are well organized have other resources like Excel files and PDF files to download and no commercials duplicating right-click to duplicate and then we'll right-click again to duplicate and Then we'll go back to that middle tab going to the accounting drop-down open up that balance sheet report the famous Balance sheet needs no introduction. It's the balance sheet tab into the right accounting drop-down this time Yes, the income statement And then we're gonna do the date range change. We're working in 2022 so I'll hit the drop-down hit it to 2022 January to December of 2022 the end of it. That's the 31st Updating that report as well. Let's go back to the first tab now first tab Accounting drop-down looking at those bank accounts. This is where the information flowed through as we set up our checking accounts And when we think about bank feeds normally we think about the bank accounts of the checking accounts So we looked at those in prior presentations the credit cards work in basically the same way It's a little more confusing often for people to kind of think about the credit card Because we have to deal with a liability account instead of a cash account But once you wrap your mind around that then the credit cards are actually kind of easier and more likely to be able to be constructed and used To build your financial statements directly from the bank feed data in other words We saw when we put together the checking transactions here that if we are in certain industries We can basically Construct our books from just the information coming in through the bank feeds However, if I go to my flow chart over here, this is a QuickBooks desktop flow chart But we're just looking at the flow of the transactions We saw that if there were accrual transactions in play such as the use of accounts payable or Invoicing accounts receivable Transactions sometimes when we have to deal with the sales receipts or inventory or payroll for example Those are all examples of things that will throw a wrench throw a problem into The use of simply the bank feeds to create our financial transactions. However with the credit cards Normally the credit cards would be kind of like just the payment side of our bank feeds for The checking account so usually with the credit card if you're using a credit card You're using it in a similar way, of course as the payments that you might be making for a normal kind of business activity type of payments and as we saw with the with the checking accounts Those are usually the easiest things to set up because they're electronic transfers by nature because they're a credit card Just like we saw in the bank feeds here If you paid the utility bill or the phone bill and that kind of stuff Then those are the easiest types of transactions to basically be able to wait till they clear the bank and Then just kind of add them as As they clear the bank and that's what the credit cards basically Would be designed to do if you're using you know a credit card instead of the checking account So if I go to the balance sheet then just to see what's going to happen here The checking account is usually an asset account Unless it's overdrawn as we saw on the prior presentation But it's usually an asset account and that means it's going to go down when we have expense type forms Going out of it and it's going to be going up with basically deposits Now the credit card is also from the same from financial institutions often the same financial Institutions as you might have your checking account with and therefore it should be fairly easy To link as well But when you make a payment from the credit card instead of the checking account going down You're gonna have a liability going up. So that's the only difference right with a credit card It's kind of like we started at the beginning It would be like the bank account being overdrawn every time we buy something on the credit card cash Doesn't go down, but instead the liability Goes up and then when we and then at some point we pay off the credit card, of course And when we pay off the credit card then the liability is going down notice We don't have any deposit side of the transaction We only have you know the the charges that we're going to be recording with the credit card and then we pay off the credit card So it's actually kind of easier In some ways because we don't have all this other stuff the credit card doesn't run through Every cycle that we're dealing with in other words the credit card Isn't generally going to be part of our employee cycle because we're not going to pay our employees on the credit card Typically, it's not going to be part of our a lot of our other, you know Normal kind of processes as the cash is the cash is involved in every cycle at some point in time So that being the case. Let's let's set up the credit card now We can do it in the same fashion we did with the bank feeds to actually import the credit cards So you could then if I go to the first tab over here, we could go to our banking drop-down and we could Simply add another bank type of account now So this is another kind of confusing component because it's actually a credit card type of account But because we're connecting it to the bank feeds We're going to be doing it, you know in the same range here and that's why it has its own little special Areas the financial institution Transaction account. Let's say this was for let's just say it was for American Express American Express American Express, I can't spell American or Express and I'm an American that likes things done expressly That's why this American uses spell check because that's what Then you don't need to spell okay American Express Let's do this one American express doesn't really matter because I'm not actually going to connect But if you were going to actually connect to it Then it's going to say connect to American Express just like we did with it with the bank accounts The different institutions may have different ways to verify, but usually they're pretty easy to To to facilitate The you have to give them verification log into the account or whatever they ask for but usually that's pretty easy So I'm going to skip however here because what we're going to do is upload the information And do it that way. So I'm saying don't connect to my bank. So we've just set up a credit card Accounts, so I'm going to say the account. I'm just going to call it generic credits card account obviously in practice you might want to Put the name of the credit card if you have multiple credit cards You're dealing with then you might want to put like the name of the credit card possibly the last four digits of the credit card Which is not something you want to give out often to others However for external reporting you could group the credit cards into a group, right? And and that way you can have it in total reporting so you can distinguish which credit cards you were using and external reporting group the credit cards together as one lump sum using zero's beautiful Edit layout tab down here to group things together. So I'm going to go down and say select an account It's going to be a credit card account. So credit card Credit card number. I'm going to make one up There it is. That's not an actual number. So if you're going to try to like Last four digits if you're going to try to You know buy something with that It's not it's not going to work. So save it save and continue Boom credit card has been in there So it's in the same banking area because it's basically this is the bank feed area is the is the general idea So let's go and now notice that also added An account to the check it to the to the register. So if I go to the account drop down what I'm trying to show here So if I go to my chart of accounts then We also have our credit card account that has been Populated here now it's pulling up. I didn't put an account number in it So the account number should actually be somewhere down here in the credit card area. Maybe it's In unpaid expenses claims sales tax. Maybe I want it under the accounts payable So maybe I make the credit the number 2010 let's say so I'm going to say let's go back into this and say this is going to be 2010 and then save it and So now I can locate it kind of down here Even though it's still kind of a bank account and that bank account term doesn't really mean current asset bank account The bank account term means basically it's has the capacity to connect to the bank feeds as does the credit cards All right, so now I'm going to upload the transaction So this means that you can download the transactions from Your bank in a similar fashion as you can with the bank feeds if you so choose So if you go to your bank you're this would I mean I'm just looking at Wells Fargo, but you could go to your American Express or whatever If you don't want to connect directly to them where you want to practice You want to put together your own bank feeds to practice with you can download this information from there or make your own File which we'll take a look at in a second. So To download it you go to your financial institution and usually somewhere there's going to be download account activity Which is different than looking at the finance by the reports. You're not looking at your Bank statements or credit card statements because those will be in PDF format We want this in a format that can be uploaded to the system Which will generally be for example Oftentimes they have a QuickBooks format which isn't QuickBooks online software It's just like a data input format So that one works pretty well and that most institutions have that quick end You don't really want that one and then if they don't have those any of those you can use the comma Deliminated which usually is opened in like a spreadsheet format and then if you want to just practice you can make your own File with a spreadsheet and then just create a comma deliminated or CSV file So let's see what that looks like So I'm gonna go up top and just say that if I go back into my accounting and I go into my bank feeds And I want it to manually import and by the way you might want to manually import in Situations where it's like you're going really far back like you're going more than a year like a year back or more Because sometimes you can get more data from the bank By manually downloading it as opposed to connecting to the bank and then possibly you might want to connect to the bank after After that that's one reason you might use a manual upload and practice other than just to practice with Once you get the data in From the manual upload or from the bank feeds You will be in what I call the bank feed limbo area where all the information will be in your system But not yet used to create the financial statements. It's it's in limbo. It has not been Brought through it needs a little bit more information Some enlightenment in order to bring it on through the promised land to be used to create the financial statements So we can up if I go to the drop-down here Then we can import the statement So if I import the statement that makes you think the way they worded that you're gonna get the PDF file and import it But that's not what's happening here What instead you're gonna be importing these files that we look like so download bank statements from your online banking again You're not really downloading like a bank statement. You're downloading a series of of Transactions you're downloaded like the bank feed now you could like those bank formats is an OFX a Q FX a Q IF there's that QBO which is quite common and if usually most of them will have a spreadsheet format Which will be as CSV if nothing else, right now if you want to make your own you can look at the template here I like if you just want to make your transactions You can actually just pull up the template and you can put your data input into this template you know date amount description and And that's and that's it and then you can upload your own data and you can and you can play with the bank feeds that way I'm gonna be using this file. So I downloaded a file that looks like this. It's a credit card file and But it's in quick. It looks like a QuickBooks like desktop program or something But it isn't if I right click on it and I it is a it's formatted I guess by QuickBooks or or they came up with the formatting or whatever, but it's not actually the software It's just a data input Format it's just a way to format the data that can easily be brought in to these online applications So it's a it's an OFX data dot QBO, okay So let's import that in here So I'm just gonna say select the file It's on the desktop, which is a messy situation But I know where everything is my desk the top of my desk has a lot of stuff on it but it's not like It's not like I'm unorganized because you just don't understand how I Organize it so I'm gonna upload it and it's uploading 16 transactions So, okay, so then we're just gonna complete the import and There it is So now just to recap if I go into my accounting transaction and I look at my bank accounts I now have my credit card account has stuff in it now So so I'm gonna go into so it's all negative now You have the same beginning balance issue with the credit cards because it's only gonna be pulling in the activity So if you had activity before The time that you started putting the credit card in you're gonna have to deal with that beginning balance issue Which we might talk we'll talk about in a future presentation when we do the first bank reconciliation Once we're we've done that everything should run smoothly. It should be quite easy After that if I go into the drop-down the account transactions We've got the account transactions on the right. These are the transactions that we have made We don't have any Because we're usually with the credit cards We're gonna be dependent on the financial institution to create the financial statements because They're perfect transactions to do that I mean we could have a system and in a full service accounting system every time I make a Purchase on the credit card I would then record it as a purchase and then match it to the credit card using the financial Institution as a verification But we're getting to the point where the credit cards were we're so confident in them and because the turnaround time is so fast That these are perfect transactions to just say look I'm just gonna depend on the bank here So in other words when I record the transaction, I'm not gonna record it on my side I'm gonna wait till it clears the bank which should happen in one to three days and then I can just record it that way So so I'm firm. We're so confident about these transactions that that's what most people are gonna do So that means we didn't record anything on our side The bank is recording them on their side because this is what got pulled in from the bank feeds So this is what got pulled in it's not reconciled yet. We have the cash coding Remember if you don't see this you can go into your user Area and then just turn on the cash coding so that you can see the cash coding if you want that It's not on by default. You have to go into, you know the users and then turn on in the banking section I think the cash coding we talked about that before I won't do it again because we're running along here And then if I go into the reconciled so now we can build our financial statements So this is what I call the bank feed limbo because these transactions have now been brought in from the bank But they have not yet been used to make the financial statements. They're still missing something something's wrong They're not quite there yet. They don't know they don't have all they don't have everything to be fully fulfilled And therefore be pulled in to to the promised land. So what do they need of course? All we have these are all going to be usually decreases. So unlike with the checking account We don't really have deposits, but we have we have payments which are kind of like but but really really You know we have we pay off the credit card But really every all the transactions here are going to be Expense type transactions and then we pay off the credit card, right? Those are the transactions that are going to be here So usually the other side of the transaction what we will construct is an expense for things that we're going to be purchasing Although we could have purchased inventory and fixed assets as as well So that's what we'll do next time and as we do that Like with the checking account we can add bank rules so that even though the first time we do this It's a pain But when we set it up properly and we do it well and we fully We don't we don't send you know people to the wrong Areas once we pull them out of bank feed limbo and then send them to like to to a bad a Worse or spot and mess up the financial statements if we set it up properly Then then it'll be basically automated going forward and then things will be easy We got to go through the pain to start and then And then once we once we once we put in the work man, you got to put in the work I don't I'm not going to say that for it. It's a trendy for it, but It's kind of it's kind of applicable here because you got to do this you got to do at the first point and then it'll be Easy after that so we'll start doing that in future presentation is no change to the financial statements yet So we don't need to take a look at the trial balance or anything and we'll move on next time