Categorize online bank transactions in QuickBooks Online

Step 1: Download the latest bank and credit card transactions

QuickBooks tries to update your bank transactions automatically every 24 hours, but you can manually update them.

1. Follow this link to complete the steps in product
2. Select Update. This updates the transactions on all of your accounts.
   Tip: If you see a message about additional authentication, follow the prompts to continue the update.
3. QuickBooks recognizes common suppliers from your bank transactions, and will automatically add new suppliers into your account.
4. Turn this option off if you don’t want new suppliers added. In Bank transactions, go to Settings ⚙ and turn off Add new suppliers.

If you have trouble downloading your transactions, you can try other options.

Step 2: Review and categorize downloaded transactions

Follow the steps below based on the device you're using.

Follow this link to complete the steps in product

1. Select the account you want to review.
2. Select the Pending tab.
3. QuickBooks sends downloaded transactions to the Pending tab, and suggests categories for each transaction. Review each transaction and do one of the following:
   • If the transaction says Post:
     • Select Post if the suggested category is correct.
     • Or change the category using the dropdown or adding a new one.
   • The transaction already exists in QuickBooks, you may have the option to match or view multiple matches.

Note: You can create a bank rule that automatically categorizes transactions for you.  You can also turn suggestions off if you want to manually categorize your transactions.

Step 3: Choose the right category

Categorize income

Money paid to you. For example, this could be from:

• Sales
• Customer payments
• Refunds
• Fixed assets sold
• Bank loans received 
• Money invested

Categorize expenses

Money paid to others. For example, money spent on:

• Office Supplies 
• Meals
• Payroll 
• Taxes
• Fixed assets

Step 4: Other categorization actions

There are a few other options to take to help you properly categorize your transactions.

Set up QuickBooks to track expenses by item

Tracking expenses by item is only available in QuickBooks Online Plus and Advanced at this time.

Record expenses with a product or service

You can record an expense in your bank feed using an account from your chart of accounts, using a product or service, or both. 

Note: If you want to record it with both, you need to split the transaction. 

Follow this link to complete the steps in product

1. In the Pending tab, search and select the required expense transaction.
2. In the Product/service ▼ dropdown, select the product or item from the items list.
   Note: You need to split the transaction if you want to use both the Product/service and Account dropdown on the same transaction.
3. Select Post.

Record money-in transactions as bank deposits or sales receipts

QuickBooks automatically records money-in transactions in the bank feed as Bank Deposits. If the transaction is a sale, use a sales form like an invoice or a sales receipt.

Once your customer pays the invoice, you’ll need to match the transaction in your bank feed. If you get paid for a sale and it shows up in your bank feed but not in QuickBooks, you can record it as a sales receipt. To do this, select an item in the Product/service ▼ dropdown when you record the transaction. 

Split a sales receipt

You can split the sales receipt from your bank feed among different products and services.

Follow this link to complete the steps in product

1. In the Pending tab, select the transaction, then select Split.
2. Enter the amount in the Amount field.
3. Select Split and post.

Add a purchase or sale account if items are missing from the dropdown

To accurately record your accounting transactions, QuickBooks needs to know which category is associated with each product or service you buy and sell. For example, you might use "Contract expenses" for your purchase account and "Billable labour" for your sale account. When you set up or edit a product or service, you specify the purchase and sale accounts.

• If a purchase account is missing, the product or service won’t appear in the Product/service dropdown for expenses. 
• If a sale account is missing, the product or service won’t appear in the Product/service dropdown for sales receipts.

Here’s how to add a purchase or sales account:

Follow this link to complete the steps in product

1. Find the product or service you need, then select Edit.
2. In the Sales and Purchasing section, set up the income or expense accounts respectively.
   Note: These are necessary to accurately track your itemized sales and purchases.

Split transactions between multiple categories

You can split transactions between multiple categories for better tracking.

Follow this link to complete the steps in product

1. In the Pending tab, select the transaction.
   Note: If the option is Match, change it to Categorize.
2. Select Split to open the Split transaction window.
3. From the Category ▼ dropdown, select the categories for the split.
4. Enter an Amount for each category so the Difference shows CA $0.
5. Fill out all the necessary information.
   Note: The field name may vary depending on the transaction.
6. Select Split and post.

Exclude duplicate transactions

Duplicates may sometimes occur when transactions automatically update from your bank after you’ve manually uploaded them. In these cases, you might want to exclude them.

1. Follow this link to complete the steps in product
2. In the Pending tab, select the checkbox for each transaction you want to exclude.
3. Select Exclude.

Excluded transactions move to the Excluded tab. They won’t be added to QuickBooks or downloaded again. If you excluded a transaction by mistake, from the Excluded tab, find the transaction and select Undo.

Categorize personal transactions on a business account

If you spend money on a personal transaction using a business account, that’s an owner’s draw. If you add personal money to a business account, that’s an owner's investment.

View cheque images

QuickBooks has partnered with selected banks to include cheque images for cheque transactions.

To view the cheque images:

Follow this link to complete the steps in product

1. In the Pending tab, select the number in the Attachments column for the transaction you want to view the cheque image for.
   Note: Transactions with an attached image will have a number in the Attachments column.
2. Select the image name, then view the cheque image in the Explore sidebar.

Note:

• The cheque image disconnects when cheques are matched to a bill and converted into a bill payment.
• If your connected bank transactions don’t have cheque images automatically attached, your bank is not supported. However, it may be supported at a later date as we work to partner with more financial institutions.