If you are new to QuickBooks or having been using it for a little you have figured out that there is a banking center where you can connect QuickBooks Online to your bank and credit card accounts. We call that the Bank Feeds. Did you know that there are quite a few mistakes that small business owners make with their Bank Feeds? Let’s look at a few.
#1: The most common mistake that small business owners make with bank feeds is thinking that it is the only way to do your bookkeeping in QuickBooks. QuickBooks Online is a small business accounting software and it has lots of functionality and ways of doing things. While the bank feeds are very helpful, you need to understand that that’s just one of the ways in which you can do your bookkeeping.
#2: The second mistake that small business owners make with their bank feeds in QuickBooks Online is that, when you’re going through all of the transactions that are downloaded from QuickBooks, you just click “add” on every transaction. Although, those transactions are not yet categorized into QuickBooks. They need to be categorized first before you click add. What happens when you’re clicking “add” on every transaction and then look at your reports, you end up with a bunch of transactions in uncategorized income and uncategorized expense, and then you’re having to go through every transaction and re-categorize it.
What you actually need to do is to look at the transactions that are downloaded from the bank and review the account category on each transaction, to see what it was for. If it was for a hotel expense, for example, then you might need to categorize it to travel. Or, if it was an office supply type of expense, you would put it to office supplies or to office expense. You never want to categorize anything to uncategorized expense or uncategorized income.
#3: The third mistake that small business owners make with their QuickBooks Online Bank Feeds is that they let them accumulate for months at a time instead of working on them every day. You can do that very easily because you probably don’t have that much activity on a daily basis. Its much easier to work on it 5 minutes a day than putting it off.