What happens if i create an expense that will not match with a banking transaction? Will that expense still appear on an expense report at the end of the year?

Hi, Michael. Yes, that manually created expense will absolutely show up on your expense reports regardless of whether it ever matches a bank transaction. In QuickBooks Online (QBO), manually entered expenses are recorded directly into the books the moment you save them. They don't need a banking transaction to "activate" them. Reports like your Profit and Loss (P&L) pull from what's in the register, not from the bank feed.

With that said, when your monthly insurance payments appear in your bank feed, QBO may not find a match for them, as you have already logged the full annual amount as a single expense. This means you'll have the annual expense you entered manually, along with 12 individual monthly expenses from the bank feed. As a result, this will significantly overstate your insurance expenses. To correct this, I have two recommendations depending on which one works best for your needs.

The first option is to delete the annual expense entry. Then, each month, when the payment appears under Bank transactions > Pending, categorize it into the correct insurance expense account and click Post.

By the end of the year, all 12 transactions will automatically appear on the P&L report within that expense category. This ensures clarity in the books and simplifies the reconciliation process.

Another option is to keep the manual entry as is, but when each monthly bank transaction shows in the feed, exclude it rather than posting it since you've already recorded the expense manually.

Whether you decide to track the monthly payments as they come in or keep your manual annual entry and exclude the bank hits, you can rest easy knowing that insurance expense will be right there on your year-end reports.

Please let me know if you have more questions.