 QuickBooks Online 2024. Bank feed to bank feed transaction. Get ready and some coffee because we're doing some quick thinking with QuickBooks Online 2024. First a word from our sponsor. Actually we're sponsoring ourselves on this one because apparently the merchandisers they don't want to be seen with us but but that's okay whatever because our merchandise is is better than their stupid stuff anyways. Like our Accounting Rocks product line, if you're not crunching cords using Excel you're doing it wrong. A must-have product because the fact as everyone knows of accounting being one of the highest forms of artistic expression means accountants have a requirement the obligation a duty to share the tools necessary to properly channel the creative muse and the muse she rarely speaks more clearly than through the beautiful symmetry of spreadsheets. So get the shirt because the creative muse she could use a new pair of shoes. If you would like a commercial free experience consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com. Here we are in our QuickBooks Online Bank Feed Practice file we set up in a prior presentation. Let's open those major financial statement reports like 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 clicking the profit and loss or income statement to open a link in a new tab and doing the same with the good old trustee trial balance. If you don't have the trial balance in your favorites you can search for it we're going to tab to the right close the hamburger change that range going from 0101242033124 tab select the drop down so we can see it on a month by month basis and run it. We will tab to the right do the same thing close the hamburger change the range first three months of 2020 for 010124 tab 033124 tab and select the drop down for months again running to refresh tab into the right closing the hamburger and changing the range 010124 tab 033124 tab months on the breakout side by side running to refresh it. Back to the balance sheet we're now continuing on with our bank feeds for the credit card so instead of looking at the bank feeds for the checking account we've been concentrating on the bank feeds related to the credit card which are usually actually easier because all the transactions for the credit card are electronic transfers typically and because we don't have to deal with so many of the deposits they're only going one way until you pay off the credit card which is what we're going to do this time. Now the interesting thing when you pay off the credit card is we have a bank feed to bank feed transaction so if I scroll up note here that we have a checking account that's connected to the bank feeds what are the other kind of accounts that could be connected to the bank feeds you could have like another checking account you could have a savings account you could possibly even have a brokerage account if it's with your banking institution and you could have then the credit card accounts also connected to the bank feeds so what's going to happen here is we have a payment out of the checking account that is going to go and pay down the liability account so that means we're going to credit the checking account or decrease the checking account the other side's going to debit or decrease the liability account of the credit card so if you were to think about this just in terms of forms before we jump into the bank feeds and I select the plus button what would be the form that I would use to make that transaction well if you were actually writing a check we would usually first think of it from the perspective of the checking account most people believe I would so that would be like a check we would write a check form which is basically the same as an expense form so if it was an electronic transfer you would think it would be like a check or an electronic transfer would be the expense form a check equivalent form decrease in the checking account however that is not the form that will typically be used when you're going from one account connected to the bank feeds to another account connected to the bank feeds and it's easiest to see that if you think about two transactions that are checking account transactions first so in other words what if it was going from one checking account to another checking account or from one checking to a savings account what would what would happen if you used an expense form well in the in the checking account side of things it would look normal because it would be decreasing the checking account which is normal for an expense form to do but when you go into the other checking account it would show an expense form that has an increase it would be like a deposit or an increase going into the checking account but it would be with an expense form that would look funny it would be correct from a financial statement point of view the numbers being correct but if you tried to filter your transactions it would be difficult to filter by because usually when you want to filter you filter by transaction type and usually if I want increases I would say it would be equal to equals and then the deposits right if it was going to be an increase if I have expenses that are increasing the account then that's going to be you know kind of a problem so you could say okay well then then why don't I think of it from the standpoint of the account that it's going into let's say for example the checking account is going to increase because I'm going from the savings account to the checking account well then in that case you'd say well then maybe I can use a deposit form that's the form used when I increase an account and you could and it would look basically correct on the checking account because in the checking account increases are formatted with deposit forms but on the other side if it was if the other side was a bit was a checking account you would have a deposit form that would be decreasing you know the the account and that would look funny so that's why those two forms although they they record the correct transaction if you're going from one checking account to another you could use either the expense form or the deposit form but neither of them look correct in terms of the transaction type if you were to filter by transaction type even though they record the correct dollar amount and the right journal entry so your other option if it was bank to bank would be a transfer so we could record a transfer and that way the transfer form isn't indicating whether it should be an increase or a decrease therefore the transfer form would be typically used if you're going from one checking account to another because that will look normal whether it be an increase or a decrease that's the idea so notice you could use any three or any of those three forms for that one transaction going from one checking account to another so then what about a credit card account well you have a similar thing with the credit card account because if you paid the credit card with an expense form then it would look correct on the checking account because you're paying down the credit card that would be a natural thing to do but if I go into the credit card form down here note that the expense forms are the forms used to record the normal transactions when we make purchases for like supplies in our case with the credit card so if I also had an expense form used to pay down the credit card meaning it's going to you know reduce the balance here right these are increasing the liability if I paid it down reducing the liability with an expense form again I couldn't really search I couldn't sort by expense form here to see the payments now you might say well okay well why don't I use the same solution I could just use a transfer and you could right you could use a transfer form and that would look more kind of normal to some degree but QuickBooks has a special form just to pay down the credit card and that's going to be called the pay down credit card and I think maybe QuickBooks is thinking that the transfer form looks like it's going from one account to another whereas the the the payment of the credit card is is is paying down an account it's not actually going into another like asset account so they felt they needed a whole another a whole another form for the pay down of the credit card but it's basically the same concept as the transfer so so now that's good because it gives us more ability to sort by transaction type although it's also a little bit confusing because now when I look at the decreases to the checking account I have to take into consideration that a decrease could be a check form could be an expense form could be a transfer or it could be a pay down credit card or it could be a pay bill form right all these other forms that are basically expense forms usually decreasing the checking account they're basically check type forms the more of those we have the more we have to basically consider how we're going to use the filters when we're searching for like increases or decreases to the checking account so there's pros and cons to having different options here I also just want to point out that you also have this credit this credit card credit over here now that would typically be used possibly if you contact your your credit card company and they said that like you you're going to waive a fee or something like that so they charged you for a late fee or something and then you want it and then you're going to waive the late fee well then you might use something like a credit card credit it's not typically used as the form to pay down the credit card although I think in their example problem that QuickBooks test drive they use that I don't think that's what it's designed for really so this is the one so this is the one therefore that we typically use to pay down the credit card let's just take this opportunity however to go to the first tab into the transactions and look at the different options so this one you can see that if I look at it from the checking account side we paid off the credit card so this might be with an electronic transfer or something that you set up to pay down the credit card on a monthly basis or something like that it decreased $100 it said it paired it to another account and if I select the drop down you can see that it defaulted not to the category which would typically default to an expense type form not to match because we haven't recorded a transaction on either side you might think it was matched it is matched to some degree but it's not matched to a transaction that has yet been recorded it's matched to a bank fee transaction which has not yet been recorded neither side of the transaction is part of the financial statements yet what when we use the match that means that one of the transactions has already it's already been recorded to the books and then the transfer is the one that we would use if it was going from bank feed to bank feed usually but from one checking account to another and then the credit card that's why it's going over here to the record as a credit card payment so if I if I save this it's going to record as a credit card so let's confirm it now normally you could see it on either side I could go to the credit card over here I could see the same thing on this side so here it's not a category which would be it's not a match record it's going to the credit card so usually I would first go to my checking account because that's what I normally think of when I pay the credit card off and I would confirm it on this side once I confirm it over here it has then been recorded when I go to the American Express credit card side then it should then be paired or then you can then you would think it would be matched right because then it would be matched so I'm going to confirm this one that records it now if I go back to the credit card then it actually recorded both sides because it was paired so I don't have to go in here and click it off on the credit card it recorded both of them because they were paired if I go to the balance sheet and go back and then I run it then I could say that in the checking account when did I pay it it was February I think in the February we had the credit card payment so now it's in there as a credit card payment so that's nice because now I can determine that it's a credit card payment but it's also a little bit more confusing if I want to sort my transaction by decreases by using my filters because now I have to add the transaction type and then I have to say it's going to be it's going to be equal to and then I have to find all the potential decreases which are now check forms check forms we know that we could have expense forms and then now we know that we could have bill payment forms bill payment of credit card and bill payment of a check and then we could have the and then we could have the credit card payment form and then I could select I'll see I have to select all of those to make to make sure that I that I pick up all the the proper transactions hold on I said I said not equal to I want to say it equals those transactions all right so so so so you can you can imagine a system where like in the old in the desktop version they lean more heavily to to using one form like you can imagine that they just use a check form for all of these right so they just label it as a check and in that case then they would all every time you want to look at a decrease whether it be an electronic transfer or paying off a bill or the credit card you would see one form or possibly a transfer form so there's pros and cons is what I'm trying to say of having these additional transaction types which are basically all different forms of checks which are the form typically used to decrease the checking account but there that is it looks it looks normal on that side and then if I exit out of here and I go into the credit card we could see it in February now then now it's in here as a credit card payment so this is really where the benefit is because again it shouldn't be an expense that would then be looking similar to the to the to the purchases I would not be able to sort by the by the payments of the credit card if it was an expense form so that's the point that's the whole point of that of that form we'll talk more about transfers I think we'll do a PayPal one as well I'll go back and and when we do that we'll talk about two checking accounts and I'll go into some more examples on on the differences between using possibly an expense form versus a deposit form versus a transfer but the bottom line is what you really want to make sure you do is that is is that don't use the transfer form or the the pay down the credit card or the credit card credit here for any transaction unless you're doing a payment of the credit card for the credit card form or unless there's a bank feed to bank feed usually it's a bank feed to bank feed transaction when when you're using the transfer form every other time increases are are basically going to be if they come through the bank feeds generally going to be deposits and the decreases are going to be basically the expense type forms and when you're in and that's and when you're in the the credit card all the payments the things that you're purchasing the supplies when we purchase them will be the expense form here and then we pay it pay down the credit card with the pay down credit card and then if I go to the first tab also just note when you see those transactions that are going to be on both sides as we saw it would be paired but you can add them on either side of the transaction so you might just want to double check like we did here just go into the credit card and then go into the checking so that you can see them as being paired on both sides of the transaction and then you can add them from either side of the transaction again I typically think of adding things from the credit card from the checking account side because if I was actually physically writing the check I would be thinking of myself from the from the checking account side of things that would then be matched you know to the credit card side of things I think that's the natural flow that your that your brain will probably fit into but again you can do it from either side all right this is where we stand in terms of the of the balance sheet at this point in time and so that is that we still have this outstanding balance we'll talk about our reconciliations because you could do a credit card reconciliation as well as a bank reconciliation credit card reconciliation should be quite easy but we'll talk about that later and then this is where we are with the p&l the profit and loss I don't think there was any change to this one because all we did was pay off the credit card not recording any new transactions here's the trusted trial balance so if your numbers match these numbers and you're following along that's great this is just basically the balance sheet on top of the income statement without all of the sub categories if your numbers are off try changing the date range it's often a date range issue