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mikelu9661
Level 3

Difference between making an record within OBO & categorization

Hello, what's the difference between making a bill/expense/record for something then match to feeds like normally rather than just categorizing it right directly from the banks/PayPal feed. For example something that occurs within every single sold, shipping postage or transaction & sale fees rather than making an expense sheet after every sale for its separate postage charge or fee charge, can I just categorize it from the feed to the right charter account? If so I like to know when should I make the record in QuickBooks then match rather then just soley categorizing from the feed so i know how to handle the situation from one to another.

2 Comments 2
KlentB
QuickBooks Team

Difference between making an record within OBO & categorization

Hello there, mikelu9661.

 

I'm here to clear things out for you.

 

As we perform transactions in the real world like an expense or invoice payments, those transactions will also reflect on your bank. Then, we record those transactions in your QuickBooks account as a counterpart to the real-world transactions. This way, we'll be able to match them and keep your books accurate. 

 

Once we connect bank and credit card accounts, QuickBooks will automatically download your recent transactions and shows you if they match any records you’ve already entered in QuickBooks. And if it can’t find a match, QuickBooks will start a new record for you.

 

When we say categorizing a transaction, we're like editing or classifying that specific transaction. We're assigning or modifying accounting information, such as payee, category, class, or location in that transaction to match our transactions in the real world and the transactions in QuickBooks.

 

When we connect to your financial institution, the program will automatically download all your bank transactions. Through Bank Feeds, you can process bank and credit card transactions efficiently giving you extra time for your other business needs.

 

We can categorize a transaction in the Banking page if it doesn't have a counterpart transaction in your QuickBooks account. When doing this process, we'll no longer have to find a match. We can directly add to your register by clicking the Add button.

 

In addition, your financial institution controls what and how information is received by QuickBooks. That's why it's highly recommended that we should coordinate with your bank before you set up online banking. This way, we’ll be able to know what connection method they support, what the fees are (if there's any), and what information you need to set up and use the feature.

 

I've added articles below that will guide you in handling your transactions in QuickBooks Online:

 

If there's anything else I can help you with, don't think twice to drop a commend below. I'll be around to help.

JJx2
Level 1

Difference between making an record within OBO & categorization

Hey mikelu9661,

You can really do it either way in QuickBooks. The main difference is that QuickBooks wont know about that transaction until it clears your bank if you don't enter it in QuickBooks first. For most expenses this will be fine but for any large transactions or checks you may want to also enter in the bill/expense/check so the reports in QuickBooks are accurate until the transaction clears your bank. If you don't care about that then you are perfectly ok with just waiting until the transaction comes through in Bank Feeds. So to summarize you can do it either way but if you enter the transaction from the Bank Feed you will have to wait a couple days before it will show up in QuickBooks via the Bank Feeds.

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