 QuickBooks Online 2022. Bank feed deposit entered as income for a cash-based business. Get ready because it's go time with QuickBooks Online 2022. Here we are in our bank feed practice file. We set up with a 30-day free trial holding down control, scrolling up a bit to get to the 125% currently in the home page, otherwise known as the get things done page business view as compared to the accounting view. If you want to change to the accounting view, it's something you can do by going to the cog up top, switch to accounting view down below. We will be toggling back and forth between the two views, either here or by jumping over to the sample company file currently in the accounting view. Back on over, we're going to be opening up a few tabs to put reports in by right clicking on the tab up top, duplicating it back to the tab to the left, right clicking again, duplicating again, back to the tabs to the left one more time, right clicking again and duplicating again. As that is thinking, let's see where the reports are located over in the accounting view, which is simply on the left hand side under reports. If we go back to the business view, then the reports in the second tab are going to be located in the business overview on the left hand side and then under the reports on the left hand side. We're going to close the hamburger up top, open up the balance sheet as one of our favorite reports. Up top, let's do the range change from 010121 to 123121 and run it. Then we'll go to the tab to the right and we'll go to the business overview back into the reports again, closing up the hamburger, this time opening up the PL profit loss income statement, otherwise known as range change from 010121 to 123121 and run. Then we'll tab to the right and go on into the business overview again one more time, last time for now at least and go into the reports and then close up the hamburger, searching for the trial balances time. We're going to do a little search for it, searching for that one. There it is. I found it. We found it going up top. It was trying to hide but I found it anyways. 010121 to 123121 and run it. So there we have it. Let's go to the first tab now and open up our bank feed information in the first tab, going into the bookkeeping in the business view to do that and then in our transactions up top. If you were in the accounting view to find the bank fees that had been input into the system, you would be on the banking on the left hand side to find it. Back on over to the bank feed practice file. We're in what I would call bank feed limbo. This is information where the bank fees have been entered into the system but they have not found their way to be making the financial statements into the promised land of creating the financial statements or checking them. They need a little bit more information, a little bit more guidance including customers, vendors and most importantly the account to be assigning them to. That's what we're doing now. We're going to be jumping on over to the deposit side of things. So to do that one way you can sort your data is by amount for example. And you can say I'm going to hit it again and look at the deposits. So now I've got the inflows that we're going to be looking at. We will go back to some of the outflows and we will talk about rules and future presentations in its own kind of area. But for now let's run, let's jump on over to the other side of things. The inflows from or into the checking account which typically hopefully in a business setting will be coming from customers in some way, shape or form. Jumping back on over to our flow chart just to get an idea of the general flow. So now we're in here the customer section or income section. How will bank feeds fit into our customer cycle? We want to do as we've been doing in the past thinking about the most easy transaction the one that we can be reliant on the bank feeds as much as possible making the process as automated as possible and then add levels of complexity from there. So we're going to start with the easiest method you can possibly use although as you use an easier method you are often sacrificing some of the added detail that you might get in place if you were to have a bit more complex method. So the easiest method would be one in which you have a cash basis but not only a cash basis you're going to be moving away from that even towards more easy to more dependence on the bank feeds to building our books directly from the bank feeds. The reason that's different than a cash basis is because even in a cash basis if you use a full service accounting system you would be entering the transaction with the create sales receipt over here you can imagine one in which you have restaurant or a food truck situation or any situation where you have a register you get paid at the same point in time you do the work that would be a cash based business but most of the time you would use this transaction and then record the deposit possibly with the bank feeds or more likely you would then have to record the deposits because you would have to group the transactions you had possibly some of them being cash putting them into the bank account and the same format as you expect them to be on the bank statements so you could do a bank reconciliation that's a huge internal control over your cash flow so if you're working at a register you will typically have kind of a process like that you're going to record the revenue on your side you're going to actually deposit them into the bank you want to be able to match out the sales that you made in the system to the grouped sales or the group deposits that are eventually going to hit the bank and therefore the bank feed will often be used as a checking figure in order to match out and verify that what you have entered on your side is correct and that matching gives you a big internal control over the process of your cash flow generation if you're a step further it would be a type of business that's quite common these days like a gig work type of business so if you're getting paid by a platform that just pays you like an Amazon, like a YouTube, like an AdSense type of thing from Google or Alphabet or whatever or something like that you're getting royalties or you're getting teaching income something like that then most likely you're just going to wait till you get paid by the platform and at that point in time you can simply record the revenue so that's what we'll start out with that's kind of the idea that we'll start off with the easiest type of method and in that method you would not be using the sales receipt or an invoice the two forms typically used to create a revenue type of transaction but instead using the deposit as it goes through the bank feeds to then record to the revenue account that means that you're not going to be using items as you record the deposit as you would if you had the sales receipt the item telling you what you sold whether it be inventory or service items whether you're losing a level of detail when you record the deposit because it's not naturally used as a sales type of transaction because QuickBooks wants you to use the items and go through the sales receipt or the create invoice so you can still do it over here but you've got to recognize you're going to lose some detail what detail will you lose you might not be able to pick up the customer as readily in some cases and you might not be able to sort as by customer as easily it'll just be basically income so the income statement will be correct but it might be a little bit more difficult to sort by customer and it might be more difficult it would be impossible in essence to have sub reports that are going to sort by item which you actually did because you're not going to be including items here the service items or inventory items because you can't on the deposit you could and have to basically on the sales receipt so that's the general idea so we'll start off now thinking about that kind of system where we're relying on the bank then we'll think about possibly adding a little bit more complexity as if we had a cash register type of situation but still on a cash basis and then we'll add the added level of complexity saying what if we have to actually invoice people how do the bank feeds fit in in that scenario okay back then to our bank feeds so we're back into QuickBooks in the bank feeds now let's think about some of the ways that you might get paid if you're using something like a gig work type of situation with different types of platforms often times you're going to be needing some kind of intermediary in order to process the payment to get it into your QuickBooks system something like a PayPal often times or something like Stripe often times to process those payments so often times we have questions with those type of intermediary platforms in terms of do I need more detail than simply the deposit that I'm going to get from these intermediary platforms when it finally hits my checking account in other words here in my checking account I'm going to see the deposits for something like a PayPal that have been grouped together most likely from multiple different sales that have been happening possibly on different platforms that are then going to be pulled over here the same could be the case for something like a Stripe for example so is that good enough would be the question in other words do I need more detail do I need to actually know each of the customers for example or possibly even each of the platforms that I would like into my QuickBooks system or is that information not relevant to me do I not need to have a whole list of all the customer transactions that I had in my QuickBooks system could I possibly get that information from say just simply the PayPal or whatever the intermediary software is and is that good enough is that appropriate for us or do I need to pull that in to the QuickBooks system are there other types of things I need in the QuickBooks system such as tracking the inventory and things like that is that something I need to do on the QuickBooks side or is that something that I don't have to do so these are questions in terms of how much data you're going to need in the system now you have other types of applications I won't get into them here but you can look into the apps on the left hand side and you can find different things we might try to connect to PayPal basically using bank feeds PayPal is becoming similar to a checking account at this point in time so rather than just being an intermediary so for example if you just had like one thing that you did and they paid it to PayPal and say you had a teaching platform for example and they paid it to PayPal and then you just took it from PayPal and brought it into your checking account then you might be okay with just saying I'm just going to wait until it hits my checking account and I'm going to call it income from basically this one thing or possibly multiple things but there are multiple platforms that do the same thing and I'm okay with that I'll just call it all teaching income once it flows into the checking account but if you're making payments out of PayPal and using it as inflows and outflows well now it's working kind of like a checking account and you would need the more detail typically so you can properly record your revenue and your expenses so we might try to connect to PayPal because it's acting more like a bank account and less like just simply an intermediary type of account but you could have similar things for a square you could have things for a Shopify type of store you've got eBay kind of connections WooCommerce and whatnot there are other applications that you can connect to there's applications for Amazon and so on if you put inventory into the picture and you put sales tax into the picture then it becomes somewhat more complicated and again the question becomes how much detail do I need in QuickBooks how much tracking of things like inventory do I need in QuickBooks versus outside of QuickBooks and how am I going to integrate more the complexity that is involved there the simplest way to have this set up the simplest type of company would be that you're doing some gig work say for like one platform or multiple platforms that all pay you kind of the same way and then you could just basically wait till it hits your checking account and record it basically as income but again PayPal you have another integration with there and inventory then will increase the complexity so we could have that you could have if you had AdSense or something like that that could flow through directly to your checking account and if that's the case and there's no inventory involved with it then of course you can record the revenue once it hits your bank feed if you've got like any kind of transfer that happens like that then you can record that possibly as revenue as it comes in and then Stripe accounts that's another kind of problem if all your Stripe kind of income came from one source then you might just wait till it hits your bank account and you'd be okay just calling it income and have all the other detail Stripe side of things but if you want all the customers that are involved in it and so on then you might need some more integration with some other software to help you to pull that information into QuickBooks you might not need it but you might need it and then we have Amazon now Amazon might be paying you in multiple different ways you might be getting Amazon Prime stuff you might be getting royalties from Amazon you might be getting Audible goes through Audible is a separate thing and you might have inventory issues with Amazon obviously if inventory is involved that gets a little bit more complex but note that if you get paid for different things from the same person or the same company like Amazon you could try to break those out possibly to different types of income accounts Audible again there's no inventory involved in it so you can bring that in fairly quickly and so those Amazon some of the general ways that you can get paid through this so let's just add one like the simplest one of the more simple types of formats we can do this so I'm just going to pick one of these Stripe kind of transactions now the Stripe is an intermediary type of transaction I'm going to wait till it hits my bank account and then I'm just going to record it into basically my system as income at that point in time now that would be that if I only get paid basically by one thing from Stripe and I'm going to assume here for example it's basically a website income so I'm just going to say it's my webpage income we're going to say for sales made on the webpage let's say and then I'm going to record that and increase my revenue account as it comes into my system here note what I don't have then I don't have the detail on who paid me on the page because I'm not pulling that information in from Stripe I could try to integrate and get that information into QuickBooks the question is do I need all the customer information into QuickBooks or would it be good enough for me to have that somewhere else like on the Stripe or possibly on the website and then just record the revenue on my side so I can get the financial transactions recorded that's the kind of thing you would want to think about notice it recorded it here as a transfer I might want to record it rather as basically a category which will most likely make a deposit type of form I'm going to transfer that over to the category I've got the date note that you typically want to add a vendor still and so I'm going to add Stripe as the vendor Stripe is really an intermediary company it's not actually who I made the sale to so it's kind of a generic vendor that I'm adding right now but I will allow me that will allow me to sort this information by the Stripe accounts everything I've recorded under Stripe and give me an added level of detail for my reporting so I'm going to say save that and then on the income account I want to add an account and put this into I'm going to say web income so I'm going to make another tab right click it on the tab up top and duplicate it and I'm going to change this to the business view or the accounting view so that I can add an account more easily by going to the cog up top and then going down to the accounting view so we'll go into that so there we have it and just a quick note as we I'm going to add some income accounts if I go into the income statement over here just note on the income side of things if you were doing a full service kind of income statement you wouldn't typically want to have a whole lot of income statement accounts in other words the general rule would be that people often run into problems by wanting to make an income account by customer or make an income statement account by item and you don't generally want to do that in other words I don't want to have a separate income account for all of my customers because that's going to make my income statement way too long and usually in a full service accounting system I could run subsidiary reports breaking out the income by customer so I don't want that on my actual income statement or they want to make too many categories for the types of things that we provide or sell inventory account by item inventory account by service item you might want some sub categories there but you don't typically want everything you do and a whole lot of service items you want them in general groups so that the income statement is a summary and you can have sub reports to give you that more detail broken out by customer or item now if you're doing this system where you're not doing a full service accounting system because you're not using the create sales receipts and the invoice you might be more likely to then say I'm going to create an income account by basically big customer or by basically platform so it's tempting to be able to say I'm going to say an income account by you know my YouTube platform or income account by AdSense or something like that if you're doing this kind of format but in general you want to be careful with that and even still you might want to be more broad and say this is my teaching platform income or something like that so that's just the general rule I'm going to go to the second tab over here let's open up our chart of accounts which now we're in the accounting view so it's going to be on the accounting on the left hand side and I'm going to close the hamburger I'm going to make a new account and I'm going to say it's going to be a income account income type of account and then I'm just going to call it sales let's call it fees and then I'm going to call it's like website income from my website I'm imagining a pretty generic name but that's what I'll put there let's save it and then let's go back to the first tab I'm going to refresh the screen go back into my transaction and I'm going to make it a categorized transaction going to put my vendor back in which I said with stripe stripe in the vendor I'm going to say now the category is going to be what I call it web site income and so that's going to be it the description pulls in we can make a rule for it in a similar fashion as we did before but on the deposit side of things tagging it out to all stripe items adding the rule so let's just do that just to add a general rule so I'm going to say let's add a rule create a rule and the rule the rule is I'm making a rule here people that's not the rule I'm going to copy the name which is stripe every time something comes in from stripe it's a money in as opposed to a money out rule and I'm going to say it's applied to all accounts here and then we're going to say it could be all or any but we only have one condition down below so either one will work for us I'm going to take the description same kind of descriptions here we had on the outflow I'm going to use the description I'm going to say it contains and then we're just going to have less than this I don't need the whole thing I just want stripe right there if it says stripe I want you to apply this this action to it what do we want to do I want to use a deposit form rather than the transfer form so this is on the deposit side when we were on the other one it was on the expense side and I want you to put it into the category of income of this website income and then the pay e is going to be in other words the customer is going to be striped even though that's an intermediary kind of thing and there it is I'm not going to add it directly but I'm going to go through and then add them as we go and let's save it so there we have it so now the rule has been set up so if I go to the rules tab now these are all the rules these are the rules I'm making the rules around here and these are the ones I've made so far that's that one if we go back to the first tab then let's add them let's start to add these we I don't need to have all these here so I'm going to we could put our cursor here and then I'm going to hold down shift and go down and I could basically accept all of those so these are all the striped transactions that are applying the rule let's update these and I'm going to update transaction type hold on a second I'm going to take those and accept those not update them accept those I'm going to do that for all the transactions here so let's say let's say I categorize these all the all the stuff with a rule I'm going to add them at this point so I'm going to take all the stuff that has a rule on it I'm holding down shift and doing all the stuff with a rule there are any other rules stuff let's just as clean this thing up and add those notice that these two aren't really rules they're just guessing so I'm not going to add those only the ones that are following my rule QuickBooks doesn't get to make their own rule to put stuff in I'm making I'm making the rules around here accept that one so we'll put that in place so now let's take a look at our our balance sheet and run it again run it again and so now we've got some deposits so let's go into our checking account not enough to turn it positive yet but that's okay that's okay and so now we've got all these deposits that are in place if I was to go into one of these stripe items then we would see the deposit form it's not going to go into the bank feeds it goes into the deposit form which is the form that is used typically when there's an increase to the account notice that this this form doesn't have an item or anything so we did a kind of an unnatural thing for QuickBooks we recorded it directly to an income account as opposed to using an invoice or sales receipt to do so but that's the easiest thing to do for lying on the bank so then if we go to the income statement tab and refresh that report run it again now we've got our income up top so we had our website income so if we go into there then here's all the money that flowed through from stripe and so there we have it and there's our total down below so that looks good and then I'm going to go back up top and go back then to our profit and loss I can also take a look then if I could let's go to the tab to do this first tab second tab let's go into the hamburger I'm now in the accounting view and I would go into the sales area which would be the get paid area if it was the business view and I can take a look at this information by let's say customer now note I have my customer list out here as stripe which isn't an actual customer that's an intermediary but it can kind of track the information that's coming from stripe which would basically be the webpage if I go into the stripe notice if I go into the detail here and the transaction list I don't have the normal transactions we would expect to see because I don't have any sales receipts and I don't have any invoices those being the types of forms that we're typically going to be in here in the receive payment types of forms we don't have any of those because we kind of bypassed all that stuff and just went to the deposit but it's still nice to add the stripe as the customer because you could then run reports so for example if I went into the balance sheet and I went into the checking account where I ran some report that was a cash detail transaction report then I could filter by say stripe by the name and that could give me a little bit more detail then if I didn't add the customer name at all so I could go down to the filters and I could say I want to filter by name the stripe that I would like to filter by stripe and then run it so now we can have some filtering options there so you don't have as much detail as you would have it because we entered this information with a deposit but you still want to enter the customer name because that could still give you a little bit more detail to sort with if you so choose so going back to the first tab and that's going to be our customer information so we went back to the second tab so now we've got the two customers customer one and the stripe customer so that's the general idea so if I go back to then the balance sheet this is where we stand on the balance sheet if I go into the income statement that is where we stand on the income statement and in future presentations we'll add a little bit more complexity to some of the deposits moving away from being completely dependent on the bank statement possibly to having more of a cash basis system that's not dependent on the bank than to a more accrual based system