 QuickBooks Online 2023. Bank feed to bank feed transaction. Get ready to start moving on up with QuickBooks Online 2023. 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. 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 sample company. If you want these to open at the same time, we suggest using the incognito window to open the sample company or another browser. You can open 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 feed practice file is in, and the business view, the one the sample company is in. If you want to toggle between the two, you could go to the cog up top and switch the view down below. Let's duplicate some tabs like we do every time. Right click on the tab up top to duplicate it. We're going to put reports in these duplicated tabs. That's why we do it every time. As you know, right clicking the duplicated tab to duplicate it again back to the tab to the middle down to the reports on the left up to like the middle kind of left area to open up the balance sheet. By the way, if you're in the business view, the reports are located in the business overview on the left hand side and then the reports. Okay, then we're going to go back to the tab to the right and then to the reports on like the lower left side. And then we're going to go into the profit and loss, which is kind of the middle area, but somewhat left middle kind of area. And then we're going to change the range. Let's close up the hamburger and that range needs to change. Let's go from 010122 tab, 123122 tab. Run it for the refreshing of it. Tab into the middle. Hamburger needs to close. The range needs to change 010122 tab, 123122 tab. Running to refresh it. Let's also open the bank feeds because that's where we're focused these days. We're going to the first tab banking on the left banking tab. That's where they are. If you're under the business view, by the way, the banking is located under the bookkeeping and then the transactions and the bank transactions. Okay, so we set up our checking account and then our credit card account. We enter transactions from the credit card account, which looked quite similar to transactions we might enter for expenses like utilities and whatnot on the checking account, except that instead of cash going up the liability went up when we entered those transactions. And now we're going to focus in on those bank feed to bank feed transactions, which is this is where you get kind of an overload of the bank feeds. The bank feeds are all nice and easy, but now you've got these two bank feeds and each one of them are kind of saying, Hey, look, I'm taking this transaction, I'm recording it. And the other ones know it like, no, I'm doing the transaction and someone's got to call out and be like, I'm the one that's handling, you know, the transaction, you know, just like you got to call out who's doing it, who's catching the ball here, you know, you've got to call it or else the two baseball players trying to catch the ball, hit each other and then fall on the ground. And then the ball lands like in the middle of them, you know, so that's what we have here. So most of the time, I think people would be thinking about this in terms of the checking account and saying, okay, there's going to be a transaction that's going out of the checking account to pay off the credit card account. So I would think most of the time to me, I would think about it as a payment from the checking account that's paying off the credit card account, although you can think of it from the credit card side of things to facilitate the transaction from the bank feed. And then the other side's going to basically the checking account. So the basic idea being, of course, on the balance sheet, now we've got this liability down here of the 96367 that needs to be paid off, that needs to go down, it's going to be paid off with a checking account transaction. Both of those have bank feeds attached to them. Now there's another issue here in that when we start to pay these off, this amount right here is not going to tie out to the balance that is owed because of that first beginning balance issue. We're going to talk about that in a future presentation. So this will flip to be a negative because we're going to, but we'll do that beginning balance issue, like I say in a future presentation. All right. So notice that there's kind of three forms that you can think of to do this as, like if you were just to say, which form would I be using to pay off the credit card? You'd probably say, well, why don't I use an expense form that's coming out of the checking account? That's one form you can use, which is just similar or a check form if I was going to pay it with a check. So these two forms are quite similar, usually used to decrease the checking account. The other side go into whatever other account we assign, the other account this time being the credit card account, you would think that would work quite well, but, and it does, you can do that, but there's kind of an issue with it in that it'll look kind of correct on the checking account side because you'll have an expense form, but then you can imagine on the credit card side, I'm going to have this expense form, which usually those are the things that result in an increase to the credit card liability, but because I used the expense form on the cash account, it's going to have an expense form that's decreasing the credit card liability. So for my sorting, it doesn't look exactly right. You could do it, not a big deal, but it wouldn't be exactly. I mean, it's kind of a little messy on the transactions of the credit card. You could say, well, then maybe I'll use a transfer form. You could do that possibly and a transfer often kind of fixes this problem because if there's two financial accounts that are having an impact and I record it as a transfer, the transfer could either be an increase or a decrease, say to a checking account. So you could use the transfer and that would work because then on the checking account side of things, the detail would be recording instead of an expense form. You'd have a transfer form in here, which that's kind of appropriate. Again, a transfer could go either way. And then over here in the credit card, we would have a transfer form. That's another thing that you could use. You can imagine possibly using, you probably wouldn't think to use like a deposit form, but you might, if it was a bank feed to bank fee transaction on the cash side, you might think about using a deposit form, right? Because if it was going to one checking account to another checking account, you could use the deposit form on one of the checking accounts and you'd end up with the same kind of problem as we use with the expense account on one of the bank feed accounts. And that would be that it would look right if the checking account that I was using on the deposit side was going into it. But if I was going to another checking account, that the other checking account would have a deposit form that would look like an expense, which is opposite to what you would think a deposit form should look like when I look at the transaction detail. And then QuickBooks adds this other form that's specific to the credit cards to kind of deal with the same kind of issue, which is going to be a credit card form, which they call pay down credit card. So this is kind of like using the transfer form in my opinion, in order to like deal with that kind of transaction detail issue and show it, but it's specific to the credit card. So those are the ideas you can use like like any of those forms to do the transaction. And it would be fine that journal entries would still work. But when you look at the transaction detail, it'll be a little bit more messy than you otherwise would like it to be. Not a big deal, but you know, that's the issue. So let's just look at that in a couple of different ways here. Let's just think about that. If I go to the checking account and notice that it might have recognized. So it recognized this transaction. So first of all, I can recognize the transaction because this amount of course is paying off a credit card amount. So I should have an amount on the credit card bank feeds on 97 or around there for let's say 97 for 275 47. If I go to the credit card and this side 275 47. So I could go over to the bank account and obviously if it paired it, I might just match it. But let's just look at some of the options. If I go into it, it recognized the other side as a credit card. So it wants to record it as like a credit card type of transaction as opposed to me categorizing it as like an expense type of form or or a transfer type of form. Let's do that one first. That's the most that would be like the most correct way to do it. Let's do that first and see what that looks like. So I'm going to say, all right, let's just add this. It's going to record it as transfer or credit card payment. And if I go to the credit card side, then it just recognized it over here and it paired it for me. So I'm going to say, all right. And then if I go to my checking account and run it, I should have in my checking account, a different kind of thing over here, which would be a credit card. There's the credit card payment. So I could sort it by credit card payment now instead of instead of for the decreases. So when I look at the decreases now, if I'm looking at all the decreases and I wanted to filter them, I can filter by check form. If I'm writing any checks, the expense forms are decreases. So the expense form where are the expense forms are decreases and the credit card payment. So here's the credit card payment. There's the expenses. So now I can now I can look at these. And so now I've got my expense forms and the credit card payment. So I'd have to recognize that when I look at my transactions, but at least it doesn't look funny. It doesn't look like a decrease from like a deposit or something. That would be weird. All right. So then I'm going to go back on up. And if I go to my credit card side of things and I go into the credit card, the payment has now been made. And that looks proper, right? So the expenses are increased in the liability in this case. And then we're paying it down with the credit card payment coming from the checking account decreasing the liability because it has now been paid off. So notice on the credit card side of things, everything for most small businesses is being constructed from the bank statement or the bank from the bank or the financial institution. The payments are being recorded as they clear the financial institution from the bank feeds instead of us matching. And the payments of the credit cards are hitting both sides are hitting a bank feed, the checking account being connected as well as the credit card. That's why the reconciliation of the credit cards is usually quite simple once you have that beginning balance issue set up because everything is coming from the bank feeds. Now that's the right way to do it. Now let's just, I just want to give an idea of why they need this credit card form. You could use a transfer form to do a similar kind of thing. But let's just, just so we can examine kind of the issues here of why they might be using these other different forms to get an understanding of it. If I was to go to this second one, so this one 309 is here. Let's, let's imagine that I said, well, I just want to categorize it as an expense type of form. And then I'm just going to say that it's paying off the credit card. I won't even put the vendor here. I'll just say the category is going to be the credit card. So now it's going to be an expense form, which is the form that decreases the checking account. And I'm just going to assign the other side to the credit card. That would be the most natural thing that you would probably think to do, right? If you didn't, if you were just going to pick a form and you didn't know about this other form that you could use, right? So I could say, okay, let's do that. And then I could add it. And so now if I go, if I go to the credit card side, it may still be able to pair that, but now it's saying it's been matched. So it matched this one. So that looks good. So I could still match it on the other side, which won't record anything new, because I already recorded on the checking account side, this will just match it and say, okay, yeah, it'll tie out helping us with the credit card reconciliation. So I'm just going to match it. That doesn't do anything new just shows both sides. And then if I go up the problem with that, and it's not a big problem. It's just, you know, I'll just show you what the difference is on the checking account. It looks kind of normal because it's an expense form that's paying down the credit card. So it's going to be an expense type of form. The other sides go into a credit card. Where is it? Here it is. So there it is. So the credit card. And so you can see over here, it's just a normal expense form. So if I go into it, it's an expense form. Boom. But that looks normal kind of because it's decreasing the checking account versus the credit card form. If I go into it, it looks like this, right? A payment for the pay down the credit card. So if I go into the other side, though, it looks a little bit funny, because if I go into the credit card side of things, then now I've got, I've got the expense forms usually increased in the liability, but then I got another credit card, an expense form that's decreasing the liability. And that's where it gets kind of funny with these enter bank feed to bank feed type of transactions. Not a big deal. The transaction is the same. The two accounts are affected. It's not going to, it's not really hurting anything, but that's the issue. It doesn't look quite right in terms of the transaction type form that's being used. You might want to differentiate that to show the payments. So I can sort this. If I wanted to sort this by, by expenses, by the things that increase the liability, I'd like to sort by expense form. And if I want to sort by the payments that are made, then I'd like to have something other than an expense form so that I could see the other side of the transaction. Now the other, the other way that, that you could see this as if I go to the first tab is now you have the same issue. I won't go into that one here because it's a credit card, but if you had two checking accounts, then you can imagine the second that you could imagine using a deposit form, right? If there's a deposit going into your checking account and it was coming from the savings cash account, then you might say, okay, I'm going to use a deposit form to increase the checking account. That would be fine looking here, but if you looked at the other account, the savings account, it would have a deposit form with a negative amount decrease in the checking account with a deposit form, which messes up your sorting by transaction. That's why if it was going to a checking to checking account, you usually use a transfer form as opposed to a deposit or expense form. All three of them work. They do the same transaction in terms of journal entries. The same accounts are affected going the same direction, but they don't look quite as quite right when you sort the detail. And then the credit card, the payment of the credit card, it's kind of like a transfer form, but they wanted to add another one for the credit card payment, I guess, to be more specific. So let's go over here and now I'm on the credit, let's say we initiated the transaction from the credit card side of things and just to test it out, it's picking up the record as a credit card, which is probably the one you want to use. But let's just try to use the record as transfer just so you can see the difference. So now I'm just going to, it's going to do the same thing, right? But now I'm just going to use a transfer form and that, and that'll be a similar kind of kind of item. You could use a category, if you use the category form over here, it might, it might actually use a deposit, but that would be a little bit unusual to use a deposit form on a credit card. So let's try to use a transfer form and record it that way starting from the credit card side. And it says category is not selected, transfer from, I'm going to say the checking account. So checking account, boom. All right, so there it is, that's right. Okay, let's add it. And so then the other side would be on the checking account. So if I go to the checking account, I have now initiated it first from the credit card. It has now matched it as a transfer on the checking account. So if I, if I check it off here, nothing new is going to be added. We've just changed it to a transfer form as opposed to a credit card payment. So then if I go to my forms and I run it, and I look at my checking account, now I should have a transfer form. So it looks like this. So, so that looks fine because the transfer could be an increase or decrease depending on which way the transfer is going. So transfer is a little bit tricky because again, it could go either way. If I'm trying to sort my, my, my cash by all decreases and all increases, the transfers kind of mess things up because it's possible that the transfer could be an increase, you know, or a decrease. It would be nice if I could maybe like record all my increases as like deposits, for example, and then use the transfers to record the decrease to my major checking account or something like that. If I want to sort my data, although it's not a big deal, but it can make the sorting of your data a little bit easier when you're trying to filter or something like that to drill down on something. And then on the credit card side of things over here, it's now flipped because it's, because it's, it's negative because now we have more payments, but we'll deal with that with the beginning balance thing. Now we have a transfer, which kind of does the same thing as this credit card payment. It still does the same function because like the expenses are the things that are increased in the liability. You would like the payment that you're making that's going the other way that's bringing the liability back down to be something different. And so a transfer kind of serves that purpose fine, but they also have, of course, the credit card payment, which also serves that purpose fine. So I'm not sure exactly what added benefit the credit card payment serves, but they have a specific form for the credit card payment. So I would obviously suggest using that because that's the format they're going to use. But just note, you might think like, why do I have all these forms that can record the same transaction? Is it wrong if I record? Do my books going to be totally messed up? No, that's kind of the reason you do have other options you can use to make those payments. The credit card payment form might not be the first form that comes to mind. When you first try to set this stuff up, you might have been making credit card payments with checks before because that's how you would pay off the credit card. That's totally fine. But it's giving you a different, but this way, bank to bank, gives you a differentiation factor. And again, I think it would be like if you're trying to get more detailed and you're trying to make a system that's going to work best going forward. Obviously, you might want to use the credit card form because that'll give you a distinguishing factor and it'll always be a decrease to the checking account that you're paying from. And it will always decrease the liability account down here and then possibly use transfers for, of course, the inter-bank transactions that are going from a checking to savings or checking to checking. And you might want to come up with a system where the transfer, for example, always decreases the checking account maybe, right? And if it goes from a savings accounts to the checking account, then maybe you want to record it as just a deposit or so. I don't know. So you can come up with your system between those items, but the journal entry is always the same. If you've learned bookkeeping in a classroom, you're probably going, but the journal entry is the same, right? It's just doing the same thing. And that's true, but the sorting data is where it gets a little messy when you're going back in and trying to filter all this stuff and all that kind of stuff. And it could make a difference for that kind of thing. So those are going to be the bank feed to bank feed stuff. So we still have this beginning balance issue here. That's why we have this negative balance, which probably wouldn't be tying out at this point in time to what's on the credit card statement. So we'll do the bank reconciliation and credit card reconciliations and deal with that beginning balance issue in a future presentation that would only be there in the event that you didn't start your credit card from scratch with a zero balance, but you already had a balance prior to when you started doing the bank feeds and setting up the bank feeds. Let's just open up the trial balance because we can see what we've been constructing thus far, mainly with just the bank feeds. And now, of course, the credit card feeds, another form of bank feeds reports on the left. Let's just type in the trustee trial balance. I just want to recommend that we use the trial balance or possibly give it a shot at least. Just give it a shot, you know? Give it a shot, 1231-22, because it's the balance sheet on top of the income statement, more streamlined. We could see everything in one place, assets up top. And then we've got our liabilities, which now include, of course, the credit card, which has a debit balance because it's opposite to what it's going to be because it's, but we'll fix that later. And then the equity section and then the income statement, income and expenses with other income and expenses on down below.