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Categorise online bank transactions in QuickBooks Online

by Intuit•40• Updated 6 days ago

QuickBooks Online helps you review categories for automatically downloaded transactions and suggests categories based on how you’ve categorised similar transactions in the past.

Note: QuickBooks Online won’t download pending transactions.

This is Katheryn from the QuickBooks team. Once you’ve connected your bank account to online banking in QuickBooks, you’ll download recent transactions every day. Let’s go over how to review the transactions downloaded from your bank, and how to categorise them and post them to QuickBooks. You’ll see a card for each bank account and credit card you’ve connected. Select a card to see the downloaded transactions for that account. Here is where you’ll see all the transactions that QuickBooks downloaded from your bank. These aren't in QuickBooks yet. You still need to post them. Select the customer or supplier for the transaction, then choose the category that best explains why you spent or received the money. The From/To is optional, but it helps you run reports later to see who you paid or who paid you. To change the transaction type, select the transaction, then use the dropdown menu to choose a new type. If the transaction is a sale, you can record the product or service you received the money for instead. You can enter any other notes in the Memo field and, if you have a picture of a receipt, select Add Attachment to upload it. Let’s look at another transaction. QuickBooks uses AI to suggest the most likely categories, based on similar transactions in your books. It looks at details like the supplier, bank description, amount, and more to make smart suggestions. You can see which categories you’ve used with this supplier in the past 24 months… And on which transactions. Select a transaction to open the details. You can also see more about the supplier, and even the URL for the supplier’s website. If one of the suggested categories looks right, just select it, then choose Post. If none of the suggestions fit, no problem—you can still choose a category manually. You can also split a transaction between multiple categories. Select the categories and other details, like the Amount. Just make sure it adds up to the total amount of the transaction. Over time, QuickBooks recognises transactions from the same suppliers and customers, and suggests categories for you based on your history, and other information about the transaction. However, you can still change the category. Once everything looks good, select Post. For some transactions you’ll see Match is toggled, instead of Categorise. These are transactions, such as a bill or an invoice payment or bank deposit, you’ve already entered into QuickBooks. Select the link to view the manual transaction you already recorded. If that transaction matches the transaction downloaded from the bank, select match instead of post. This prevents duplicates. If the match is not correct, don't worry. You can select Categorise to add it to QuickBooks as a brand new transaction. Or, if you know you definitely entered the transaction into QuickBooks and the match is wrong, select Find other matches to match it to the correct transaction. Now you’re ready to categorise transactions for your connected bank and credit cards.

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 Open this link in a new window
  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 recognises 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 categorise downloaded transactions

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

Follow this link to complete the steps in product Open this link in a new window

  1. Select the account you want to review.
  2. Select the For review tab.
  3. QuickBooks sends downloaded transactions to the For review tab, and suggests categories for each transaction. Review each transaction and do one of the following:
    • If the transaction says Add:
      • Select Add if the suggested category is correct.
      • Or change the category using the dropdown or adding a new one.
    • Select Add to categorise the transactions
    • 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 categorises transactions for you.  You can also turn suggestions off if you want to manually categorise your transactions.

Step 3: Choose the right category

Categorise income

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

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

Categorise expenses

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

  • Office Supplies 
  • Meals
  • Taxes
  • Fixed assets

Step 4: Other categorisation actions

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

In QuickBooks Online Plus and Advanced, you can track your expenses by item. You can use it if you keep track of your inventory or need item tracking for your job costing reports. Here’s how to turn it on:

  1. Go to Settings Settings gear icon. and select Account and settings.
  2. Select Expenses.
  3. Select Edit next to Bills and expenses, then turn on Show Items table on expense and purchase forms.
  4. Select Save then select Done.

Note: To use the Estimates vs. Actuals report in QuickBooks Online Advanced, you need to track your expenses by item. If you're not sure whether you need to use item tracking, talk to your accountant.

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 Open this link in a new window

  1. In the For review 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 Add.

You can split transactions between multiple categories for better tracking.

Follow this link to complete the steps in product Open this link in a new window

  1. In the For review tab, select the transaction you want to split.
    Note: If the option is Match, change it to Categorise.
  2. Select Split which opens the Split transaction window.
  3. From the Category ▼ dropdown, select the categories you want to split the transaction into.
  4. Enter an Amount for each split so the Difference shows $0.
  5. Fill out all the necessary information.
    Note: The field name may vary depending on the transaction.
  6. Select Split and add.
  • 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.

Result

After completing these steps, your bank transactions will be categorised correctly in QuickBooks Online. This helps maintain accurate financial records and ensures your reports reflect real activity.

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