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Categorise online bank transactions in QuickBooks Online

SOLVEDby QuickBooks40Updated 5 days ago

Learn how to review downloaded bank and credit card transactions.

After you connect your bank and credit card accounts QuickBooks automatically downloads the latest transactions and suggests categories for these transactions based on how you, and other customers, categorised similar transactions. This helps identify tax deductions and tells you where your business makes and spends money.

Note: QuickBooks Online won’t download pending transactions. It only downloads transactions when they’re no longer pending and are officially posted on the bank's site.

Step 1: Download the latest bank and credit card transactions

For most banks, we try to refresh the latest available transactions every 24 hours. Some may take a little longer. You can also manually update your accounts anytime:

  1. Go to Transactions and select Bank transactions (Take me there).
  2. Select Update.

This updates all of your bank and credit card 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.

Here's what to do if you have trouble downloading your transactions.

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

Step 2: Review and categorise downloaded transactions

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

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:
    • Select Add if QuickBooks suggested the correct category for that transaction.
    • Or, change that category by choosing another one from the dropdown or adding a new one.

To streamline the process, you can create a bank rule that automatically categorises transactions for you.

If the transaction already exists in QuickBooks, then instead of categorising it, you may have the option to match, add, or view multiple matches.

  • Categorise income - money that was paid to you - to show where the money came from, like sales, customer payments, and refunds. The business might also receive money if you sold a fixed asset, received a bank loan, or you invested in the business.
  • Categorise expenses - money paid to others - to explain how money was spent, for example, on office supplies, meals, payroll, taxes, and fixed assets. If you pay yourself (called an Owner pay or Owner draw), this “equity transaction” is also considered an expense for the business.

Other categorisation actions

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

You can split transactions between multiple categories for better tracking.

  1. In the For review tab, select the downloaded transaction to expand the view.
    • If the option in the Action column is Match, change the Find match to Categorise.
  2. Select Split (Accountant view) or Split transaction next to Category (Business view), which opens the Split transaction window. 
  3. From Category▼, select the categories you want to split the transaction into.
  4. Enter an Amount for each split so the Difference shows R0.
  5. Select a Supplier or Customer name for each split.
    Note: The fieldname may vary depending on the transaction.
  6. When you're done, select Apply and accept.

It’s rare, but you might find duplicate transactions in your bank feed. This generally happens if there is an issue with your bank connection so you upload the transactions yourself, and then a second (duplicate) copy is later downloaded from the bank. If this happens, you should exclude duplicates. 

  1. Go to the For review tab.
  2. 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.

It’s best practice to use personal accounts for personal transactions, and business accounts for business transactions, but sometimes you may end up with a personal transaction you need to account for.

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.

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