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Categorise online bank transactions in QuickBooks Online

by Intuit Updated 1 month ago

Learn how to categorise transactions uploaded to QuickBooks Online.

Review categories for automatically downloaded transactions when you connect your bank to QuickBooks Online. QuickBooks suggests categories based on how you categorise similar transactions.

In this article, you'll learn how to:

Note: QuickBooks Online won’t download pending transactions.

Download the latest bank and credit card transactions

For most banks, we try to refresh transactions every 24 hours. You can also manually update your accounts anytime:

  1. Go to Transactions and select Bank transactions (Take me there).
  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. Not all banks require this, but some do for added security.

Note: QuickBooks recognises common suppliers from your bank transactions, and will automatically add new suppliers into your account. Turn this option off if you don’t want new suppliers added. In Bank transactions, go to Settings ⚙ and turn off Add new suppliers.

Review and categorise downloaded transactions

  1. Go to Transactions and select Bank transactions (Take me there).
  2. Select the account you want to review.
  3. Select the For review tab.

QuickBooks sends downloaded transactions to the For review tab, and suggests categories for each transaction. Review them one by one:

  • If the transaction says Add:
    1. Select Add if the suggested category is correct.
    2. Change the category by choosing one from the dropdown or adding a new one.
  • If 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. In Bank transactions, go to Settings ⚙ and uncheck Enable suggested categorisation.

Choose the right category

Categorise income

Money paid to you 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
  • Payroll 
  • Taxes
  • Fixed assets

Set up QuickBooks to track expenses by item

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

  1. Go to Settings Settings gear icon., then select Account and settings.
  2. Select Expenses.
  3. Select the Bills and expenses Image of the edit icon. pencil icon. Then, turn on Show items table on expense and purchase forms.
  4. Select Save.

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.

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

  1. Go to Transactions, then select Bank transactions.
  2. Under the For review tab, search for the expense transaction that you want to record and select it.
  3. In the Product/service ▼ dropdown, select product or services 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.
  4. Select Add.

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. 

  1. Go to Transactions, then select Bank transactions.
  2. In the For review tab, select the transaction you want to split. Select Split.
  3. In the Product/service ▼ dropdown, select the product or services you want to split the transaction into.
  4. (Optional) In the QTY column, enter the quantity of the item. Then, enter the amount in the Amount field.
  5. Select Apply and accept.

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:

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

Split transactions between multiple categories

You can split transactions between multiple categories for better tracking.

  1. Go to Transactions and select Bank transactions (Take me there).
  2. In the For review tab, select the transaction you want to split.
    Note: If the option is Match, change it to Categorise.
  3. Select Split which opens the Split transaction window.
  4. From the Category ▼ dropdown, select the categories you want to split the transaction into.
  5. Enter an Amount for each split so the Difference shows GBP £0.
  6. Select a Supplier or Customer name for each split.
    Note: The field name may vary depending on the transaction.
  7. Select Apply and accept.

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. Go to Transactions and select Bank transactions (Take me there).
  2. In the For review 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.

Categorise 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.

Note: The cheque image disconnects when cheques are matched to a bill and converted into a bill payment.

To view the cheque images:

  1. Go to Transactions and select Bank transactions (Take me there).
  2. In the For review tab, select the transaction you want to view the cheque image for.
    Note: Transactions with an attached image will have a number in the Attachments Attachments paper clip icon column.
  3. Select the image name, then view the cheque image in the Explore sidebar.

Note: 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.

We're here to help
If you're confused about how to review, match or categorise transactions, or need help with manually uploading them, let us know. Sign in to QuickBooks and start a discussion with a qualified QuickBooks Online expert in the community.

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