One of the biggest benefits of moving your books to the cloud is the ability to utilize bank feeds to speed up your accounting and monthly closing processes. What are bank feeds? Bank Feeds are downloaded, cleared transactions from your bank or credit card company that is imported into your accounting software. Here’s how they can help you streamline the transaction posting and reconciliation process in QuickBooks Online (QBO).
Transactions are imported automatically
Once a bank or credit card company connection has been set up (super easy to do, almost every bank allows it), QBO automatically fetches cleared transactions daily. You don’t even have to think about it. They are ready to me matched, reviewed or auto-posted.
Transactions are matched
For those transactions that already been entered in QBO (checks, deposits etc.), QBO will find and match the cleared transaction and mark it as reconciled at the same time. When you approve the match, you are doing your bank reconciliation constantly throughout the month. Therefore, no need for tedious bank or credit card reconciliations at the end of the month. The final reconciliations will take a few seconds!
Transactions are reviewed
For those transactions that have not been posted to QBO yet, i.e. debit and credit card transactions, the QBO will list them for your review and posting. Once added (posted) the transaction is reconciled and marked with an R in the register.
Bank Feed Rules
To automate the process further, QBO allows you to set up rules that will help the program identify vendor transactions by entering keywords to look for in the bank description/memo field. Once these rules are set up, each downloaded transaction will default to the coding set up in the rule. Most of the time the transactions can be approved and added (posted) immediately since they are already coded to the correct vendor and expense account. However, you can edit the transaction if the coding needs to be changed before posting it.
For those transactions that are always coded to the same account (no exceptions) you can automate the process further by creating a rule that will automatically post the transaction when it is downloaded. No review required. The transaction posts to the register when downloaded with the correct coding and is marked as reconciled. Never waste your time on small recurring transactions.
Once all of the downloads have been reviewed and posted, you are ready to do your reconciliation. This should only take a few seconds as you have been reconciling your accounts constantly by recording cleared transactions as they import. You can choose to complete the reconciliation periodically or do it at month end.
Fast month end closing
There is no need to wait for your bank statement on the 10th of the month to complete the reconciliations, you can complete all of your reconciliations on the 1st of the month and run financials once all of the receivables and payables have been entered.
Of course, all checks that are issued need to be posted in QBO at the time they are issued in order to maintain an accurate account balance at all times. If not cleared, these checks will be outstanding on the reconciliation.
The bank feed process is especially efficient for posting credit card transactions. Instead of taking the time to summarize the monthly credit card statement, or post each transaction manually, the bank feed system will allow you to stay current on your postings throughout the month with almost no manual data entry. If you need supporting documentation for a credit card charge you can contact the cardholder and request it instead of waiting for receipts at the end of the month.
Once you’ve used QBO bank feeds you’ll never want to go back to the old way of posting and doing bank reconciliations. Next time, we’ll show you how to use the QBO mobile app to record transactions on the fly to help automate the accounting process further.
If you need help implementing any of these technology solutions, contact Gary Cates, our strategic planning expert, for additional information at 714-672-0022.