QuickBooks Online 2021 add normal expenses to books from Bank feed limbo. In other words, we have information into the system directly from the bank with the help and use of the bank feeds. They are in what I would call bank feed Limbo, meaning they’re in our QuickBooks system, but not being used to either verify or create financial statements including balance sheet and income statement. Now, we will go through the normal Expense Type of transactions to start that process taking the items out of bank feed Limbo, putting them into QuickBooks, so that they can be part of our normal bookkeeping.
Let’s get into it with Intuit QuickBooks Online 2021. Here we are in our quickbooks online bank feed test file, we have imported information into our system using the bank feed information. And now we have the information in what I would call bank feed Limbo, which we can find on the left hand side in the transactions tab. So we have our information into the one account a bank account up top indicated by the tag up top, then we have our information down below. It’s in bank feed Limbo, because it’s not being used to either support or create financial statements, including balance sheet and income statement.
To verify that let’s open up the balance sheet and income statement by going to the tab up top, I’m going to duplicate the tab, right clicking on the tab to do so and then duplicate we’re going to duplicate that process again, right clicking and duplicate. So now we’ve got the two tabs up top, I’m going to open up on the far right tab, the P and L the profit and loss, the income statement, three names, same thing. And then in the tab to the left, we’re going to be opening up the good old balance sheet report. So once we’re on the tab to the right, we’re going to go down to the reports on the left hand side, opening up the P and L the profit and loss also known as the income statement.
So here’s the p&l profit loss, and we’ll open that up, we’ll change the date range change, indeed, let’s do it from a 101 to zero to 1231 to zero, whatever range is covering the data you’re working with, we’ll be fine running it, there’s nothing there. That’s not very impressive. That’s because we haven’t included anything from the bank feeds in yet. We’re creating our financials basically from the bank. So then let’s go then to the second tab on over and let’s say well, what about the balance sheet, go into the reports down below, and open it up the good old bs balance sheet, and then range change that one up top starting at, in our case, oh 101202.
Hold on a sec, something funny happened, oh, 101 to zero to 1231 to zero, run it. And then that beginning balance for me put in that beginning balance. So I’ve got that 185, which is kind of annoying to me, because I don’t feel like but I’m okay with that. So we’re going to have the 185. That’s all we have thus far. Going back to the first tab, then we’re in our transaction item, I’m going to close up the hamburger up top hold down Control, I’ll scroll in just a little bit, I’m going to probably scroll in and out a little bit as we go through this, just because it can adjust or modify the way we see the screen.
So then we’re in we’re inside here, we got our transactions down below, we went through the types of transactions last time kind of a layout of the screen, I’m going to hit the cog to the right hand side, I will typically have check numbers on if I had any check numbers, I don’t have any. So I’ll keep them off right now, I’m not going to group by month, I’m going to take a look at all the data together. And then I typically will tick off all of these items down below so that I have all the data including showing the bank detail in case I want to use that bank tape detail to make bank rules with.
So that’s what we have there. Then I’m going to go through some of these transactions, I’m going to kind of pick and choose some of these transactions, so that we can do like the easy ones. First, let’s take a look at the easy transactions, just the normal bank feed type of transactions. Remember that by default, it’ll basically be by date. But you can also sort by description. So if I wanted to kind of group everything together, and then and then enter a lot of transactions at one time, or this can help you to think about your bank rules.
As you enter the bank rules, you can do this, your two methods you’re probably thinking about if you’re thinking if you’re entering a whole bunch of data, like a whole year’s worth of data is do I want to do it month by month, and then that’ll help me to do a month, reconcile it, make sure it’s correct, do the proper bank rules and then go to the following month, or do I want to just jump into it and then enter all the like transactions at one time, which can help you to enter the data really fast, but not be quite as methodical, you know about it. So then let’s go ahead, I’m going to go ahead and sort it by date here.
And then we’re going to go through and find a few of these items that are going to be the easier transaction. So I’m really looking for kind of a decrease type of transaction. So I could search for amount here, I’m looking for the amounts that are going to be taking the transactions down. So the ones with a negative number, so maybe I’ll go for the negative numbers here. And I’m looking say for the utilities. Let’s go for the So Cal utilities. I’m going to start with the older one, in my case. 519 20 obvious
See, there’s a couple of them. For the utilities after I enter one, then I can enter a rule and the bank feed rule should then apply to the other ones as well. So now that I have this information, I’m looking at this item. Now, I can’t just confirm it. Because notice that QuickBooks has the wrong account, it shouldn’t be going to the personal payee, it’s going to the wrong account, in part because I deleted some of the accounts, so that we can add them as we go.
But this should be going to an expense account, possibly utilities expense, also, I want to have a vendor related to it. So if I wanted to sort by vendor, I can, I don’t need the vendor to create the balance sheet and the income statement. But if I want to then have the added detail of stored in my data by who I paid, then I need to add it notice that you might say, Well, I have it here by the description, it says So Cal gas right there. But that’s not the vendor that’s that’s the memo that came in the electronic transfer from the bank feeds. So I want to take that memo and use it to make a make a vendor with so I’m going to click on this item, that’ll give us the detail.
So the dates, probably something that you’re going to remain the same, this vendor, I don’t have any vendors yet. So I’m going to construct them as I go, just using the bank data, basically, to do it. And usually you can get it kind of from the memo down here, I’m going to take that memo SoCalGas gas company, get to make the vendor with it. Now, when you do the first month, you got to be careful and say, okay, you know, how do I want to sort the vendors, I don’t want to have like multiple vendors for the same transaction.
So make sure that as you go forward, you’re not adding multiple vendors can adjust as you go, because then you’re gonna have too many vendors. And when I do the second transaction, I should be taking it consistently to the same vendor here unless I have some reason to create a different one.
But I’m going to just add the vendor. Now I don’t need to add a lot of detail on the vendor, I’m not going to say I need details for them. Because it’s the gas company, I don’t really care about their contact information or anything like that, I just want to have the vendor in there so that if I want to sort my data, my data by who I paid, I could do that. But if I want to enter more detail for a vendor, I could go to the details here and get their phone number and this kind of stuff, their contact, their address, and all that good stuff. But I’m just going to go ahead and say save, add that vendor as we go.
And then the account. So what account is it going to go to notice I basically deleted all the accounts. So I could show us how to how to make accounts as we go, the sole Cal gas company, if you had already set up a chart of accounts from into it would probably be going into a utility type of account. So you’d probably add it to the utility type of account.
But remember, as you add accounts, you have a lot of flexibility, in terms of how you’re going to group the accounts, you might just call it for example, if you’re in a company that uses a lot of gas, then you might not be grouping say gas telephone electric, you might be saying I want to put gas separate, I want to track gas independently from the electric bill. And then you could do that you can say this is the gas expense, or something like that. But I’m going to put this into utilities. In my experience at this point, electric and utilities probably are the two that kind of get grouped together, I’ll break out the phone in its own category.
That’s how I would typically think of it. So I’m going to add an account as we go. Most of the decreases most of the time, the account we’re going to add are going to be expense accounts, because it’s going to be a decrease to the checking account. And usually those are expense accounts. Not always but usually. So then I’m going to say it’s going to be a utility type. The second detail type not as important, the name is going to be important, because that’s what the name of the account will be. It’s going to be utility, so I’ll keep it at that I don’t need to really call it utilities expense, because it’s already an expense type of account.
And when I see it in the drop down, I’ll see it as an expense. In other words, if I say yes, and I hit the drop down, you can see here that the account type is on the right hand side. So there’s utilities expense. So if you put expense in the name, like some accounts that just sound right to have, you know, utilities expense, it sounds right to just have an expense, but you don’t have to put it in the name. But if you want to you can. So then if we scroll down, we’ve got our tags down below, I’m not going to be adding the tag, the memo is coming in from the bank feed information,
I’m not going to attach anything related to it, we could add a rule with it. And that could be useful because the rule could then help us to to do future transactions. And so we might want to do that methodically and add the rule rather than kind of have QuickBooks guessed the rule most of the time, but I’m not going to do it this time. Notice I’m going to do it in future transactions. And normally, any new transaction, we don’t have a rule, you might want to create it manually yourself so that you can have more control over what that rule will be.
So I’m going to say confirm. And so there we have it to now if I scroll down, I still have these other two that didn’t automatically apply out because I didn’t have a rule and QuickBooks didn’t basically automatically put a rule to it. So I’ll start to put the rules next time as we go. Because again, that’s going to be the normal process that you would you would kind of want to do to make this as fast as possible. So we’ll start with that next time. And then if I go to the categorized area, so now we’ve categorized this item.
So it’s categorized, it’s been added to the expense utilities, we can then see the effect of it on the financial statements, because now it should be included in our financials. So if I go up top, then to let’s go to the income statement, well, let’s go to the balance sheet, and then I’m going to refresh this report by running it again, I’m going to close the hamburger hold down Control, scroll up just a bit. And then within the checking account, if I zoom into it, if I click on this account, that will zoom into it, give us our auto zoom. And then we have that 185, which was the opening balances. And then there’s that 2953.
There it is, QuickBooks used an expense type of form to input this meaning we entered it with a bank feed. But expense, the QuickBooks is not going to take us back to the bank feed data input field, it’s going to use a form that’s what QuickBooks does, meaning, if I go to the desktop version, just to look at these forms in a flowchart format, a normal transaction, what we’ll QuickBooks will do when it records transactions, is look for a data input form like a like a bill, invoice receipt, if we’re talking about things that are affecting the checking account, it’s typically a check form or an expense form, which are basically similar forms, and or then and a deposit type form for the for the increases to the checking account.
So typically, when we enter the data, that’s what the form is going to be used, meaning if I drill down on this, it’s not going to take us to the bank feeds, it’s going to take us basically to an expense form, the data input that we used basically was sufficient to populate the expense form, we have the payee, and then we have the date. And then we have the other side go into the utilities.
The expense form is the form that shows a decrease, it’s like a check form shows a decrease to the checking account, other side then go into whatever account we assigned, in this case, the utilities account, closing that back out. Scrolling back up, going back to our our balance sheet, let’s take a look at it on the profit and loss next tab to the right, I’m going to run that report to freshen it up. So we’re looking at a fresh report, there’s all utilities expense, so the utilities expense have now been added in the expense item like you would expect.
There it is in our detail. And it’s an expense type of form that has been added with the help and use of the bank feeds. So going back on over there, we have that also note, if I right click on this tab again, I’m going to duplicate this report again. And let’s just consider the the vendor that we have entered as we go as well. So meaning I had to add the vendor or I didn’t have to I could have not added the vendor. But if I add the vendor and I go to the expenses tab on the left hand side and look at the vendor tab up top, then I can sort my data by vendor, there’s the SoCal Gas Company. If I didn’t add the vendor, I couldn’t sort in this way.
And there I have it. Now I could see my detail for the SoCal Gas. Or I could run reports by vendor, which again, I need to assign the vendor to do so let’s go back to the first tab again, I’m going to hold CTRL down, scroll down just a bit, I’m going to go back to the first area for review, go into the items for review. Let’s take a look at another one. So I’m going to scroll down, I’m going to kind of pick and choose the items, there’s the phone bill that should be fairly easy. But let’s pick up a primary here’s a primary life insurance type of transaction.
So let’s say we got that one we’re gonna we’re gonna categorize that. So we need to choose an account that’s the minimum that we need in order to do so I’m going to select the primerica account here, we’re gonna hold Ctrl scroll down just a little bit so I have a little bit more information. And so I’m gonna say this is going to be primerica life insurance.
Now there’s another there might be a similar name to some other items. So we want to make sure that we’re picking up the names necessary to make a rule on. So for example, I might have two places where I where I pay primerica. But I might want to have a different vendor, possibly so that I can play out a different rule, even though you know, it’s going to the same place but they’re for different amounts, it might help us in other words, to have two vendors, so that we can apply it out to different rules, or you might have one vendor that that then again, you want to play out for two different expense accounts that you’re paying.
So in that case, it could help us to have the full description in the memo down here. So that I can create a rule that we’ll assign out even though it’s going to the same vendor the same place to two separate expense accounts based on the added information in the in the detail that’s been given to us. So let’s see, I’m going to I’m going to tab over I’m going to add the vendor I’m just going to save private primerica life insurance. And so then I’m going to say the category I’m just going to make a generic kind of insurance expense account for it.
You might put it insurance, sometimes it goes into prepaid insurance if you’re doing an accrual process, I’m just going to make it a generic insurance expense account at this time. So I’m going to say this is going to go to insurance expense. So it’s going to be an expense type of account. And I’ll make it insurance. So travel, I’m going to say other here’s insurance insurance. Just a general insurance expense, I’m going to save it and close it. So there we have it.
And this time now I’m going to say, look, I want to make a rule based on this. So that every time I paid this, I’m going to I’m going to have it be automatic. So I’m going to make a rule, I’m going to make it as specific as possible to this so that I can I can apply it out every time. So the rule name, I’m oftentimes gonna name it just the name of the vendor. So I’m going to call this primerica life insurance rule, it’s going to be a money out rule, meaning of course, we’re talking about money leaving the checking account here, and then we’ve got the the bank, we can assign it to all bank accounts, or we can just assign it to the one we are working in.
So if we have a same vendor that we’re going to be paying out of a different account, we might want to use the same rule, I’m going to assign it to all but it doesn’t really matter in this case, because we only have one account at this time. But when we have a checking account or something like that, it might be applicable. And include, so I’m going to say we have the rules down below. Now, oftentimes, we only have one rule, but we can add other conditions. For more complex rules, I’m usually just going to be looking at one rule.
And then later on, when we get some more complexities, we’ll talk about, you know, more complex rules. And then if you have more than one rule, you could say I need it to meet all the rules, meaning if I have multiple conditions, multiple rules, I needed to meet all rules in order to apply this rule. Or you could say it just needs to meet any of these rules in order to apply them. It doesn’t matter for us, because I’m just going to have one rule at this time. And then we can assign the rule to the description, the bank text or the amount.
Normally, we’re describing it to the description, because that’s where the most descriptive information comes in through the bank feeds. However, note that there is kind of a difference between the description and the bank texts, the bank text is kinda like a memo that comes through. So if the rule does not apply at one of these, then try the other one toggle back and forth between the description and the bank text, then we could say it either contains doesn’t contain or is exactly.
So contains would be a little bit more broad, meaning I don’t want it to say exactly this memo, including all these numbers down here on the memo on the description, because the next one, the numbers might be different or something right, I just want it to contain what I tell it to contain. If it doesn’t contain something that might be useful when you have like a more complex rule with multiple conditions. Not typically the default is exactly if you want something to be exact, then you would use this item down here.
And then it says primerica that’s not descriptive enough for me, I wanted to include this whole thing. here because I’m going to maybe have someone else that I pay primerica, but I want this one to be the life insurance item. And then if it meets that condition, then if it meets this condition, then we want the transaction type to be an expense type. That’s basically the form kind of like a check type of form, meaning, you know, it’s going to be done with a check kind of form, like Expense Type of form, decrease in the checking account, the category, that’s the account.
I don’t know why they don’t call it an account, but we’re going to call it a category, which is the insurance expense account. And then the payee is going to be primerica life insurance, that’s the vendor that we just set up, I’m not going to assign any tag. And then the memo down here is going to pull in the memo, it says automatically confirm transaction, this rule applies to auto confirm, I’m not going to do the auto confirm, I’m going to turn off the auto confirm because I would like it to play apply out the rule, but not confirm it automatically. I want to go in there and physically give it a double check before I confirm it.
And that will help us out with our practice problem as well. So I’m not going to just say just as soon as it comes in from the bank, just confirm this rule and put it right into my books you can but it once you become comfortable with it. But for now I’m going to take that off and I want to test it out for like a month or two to make sure it’s it looks good. and confirm them manually. So it’ll apply the rule, hopefully, but it won’t be confirmed and then I’ll go through and confirm them. So I’m going to say save it. Let’s do that.
And now what I would expect to happen then if I go back to my information is that I could sort by the filter now and sort by rules applied, but I can’t there’s nothing in there. There’s no rule applied. And I’m going to say well, why didn’t it apply it? Because if I unfilter this, and I go down, I’m gonna say well, there’s primerica life right here, it should have applied it to those two, why didn’t it do so. So if I go back up, then I’m going to go to the Rules tab to see that rule.
There’s the rule that I made. I’m going to edit it. And typically the toggle that I’m going to have is between the description and the bank text. So I’m going to say all right, it didn’t work with a description. Let’s try the bank text. And then save that. And then if I go back on over to the banking side of things, and I say okay, let’s search and see if it applied the rule and that function, and I’m going to say the drop down rule applied. I’ll search by and there the rule is applied. It’s assigned to the insurance account and now we have a payee that’s included. I’m going to close this back out. Note that sometimes it’s useful to sort your text by the payee.
Now, because if it has a payee in here, that can give you an indication that it’s more ready to be approved in that case, whereas if it doesn’t have a payee or a customer, that’s an indication that you need more work, you need to do some more work for it. So I’m not going to add or so if I scroll down, I’m going to just add one of these items down here. So I’m going to add the latest, the earliest one, the 518 ones you could do so you could add them all by clicking them off, like in this way, and basically batch adding them up, I’m holding down shift to click them all off, and I could confirm them at one time. But I’m just going to do one at this point.
So I’m going to click this one, we don’t need to click it, I’m going to confirm it over here. Notice this item also shows that the rule is being applied. So I’m going to confirm this one. And then let’s take a look at what happens to our financial statements. Let’s go to the balance sheet. Now I’m going to go to the balance sheet and run it again to refresh it hold down Control scroll up just a bit, then I’m going to zoom in on that 130. So there we have the transaction for primerica life, if I go into it, it’s going to be a check type of form as indicated by the transaction type.
In other words, it doesn’t take us back to the bank feeds, but to the expense kind of form, which is like a cheque type of form. closing this back out scrolling back up top back to the balance sheet with the back arrow, then on the profit and loss, I’m going to go into that run this report, we then see the insurance item here as an expense decreasing on our income statement. Also note that if I go to the vendor tab on the right hand side, and then I go back to the to the vendors, let’s go here and then go to my vendor tab.
Now we got our two vendors with primerica and So Cal, it’s useful to add the vendor when you add in the transaction so that that will indeed be the case, let’s do one more for the telephone, because that’s going to be fairly straightforward. Let’s say we got Verizon here. So I’m going to go down. And let’s search it by the description. And I’m just going to search out Verizon Wireless, which will be down at the bottom, and I’m going to pick like the oldest one. So I’ll pick this one here. And then once again, I need to I need to add some details.
So I’m going to add it because it’s the first month, I’m going to say I’m not going to pick up all the detail, I’m just going to call it Verizon Wireless, that’s going to be my vendor, paste that into the vendor tab, I don’t need any detail on that’s all I’m going to add right there. So I’m just gonna say save that I don’t have any tag that will be applied, that’s basically it, then I want to assign a rule.
So I’m going to say give me a rule on this, because the Verizon will be fairly standard, I’m going to once again paste the name of the of the vendor as the rule, typically, it’s going to be a money out rule all bank accounts, that’s fine. Either one, all or any of these will apply, because I’m only gonna have one condition, we have the description, I’m going to go to the bank text this time, because last time the description didn’t pick it up with a bank text it did. And then I’m gonna say it contains then Verizon Wireless, not the whole description down here.
Not everything that’s in the description numbers, just basically that name is all I want. That should be enough note once again, that if I had two different locations, maybe something in this detailed description will indicate one location to the other, helping us to apply out automatically to two different locations or two different accounts if necessary. And this case, we’re not doing that we may talk more about that later. expense type of account is the transaction type, we want it to be going to an expense account, which I’m going to add a new one, we’re going to add a telephone expense, we could put it to utilities, just like we did on the other one.
But I like to break out the phone company. This is your choice in terms of how much detail you want. On the expenses. I’ll keep it utilities here, but then I’ll call it telephone on the name. And that’s it. So I’m going to go ahead and save and close that. So there’s the category the vendor is going to be Verizon, I’m not going to add any tags. And then once again, I would like to confirm it myself not have it auto confirm at least for the first few months. So I’m going to say save it.
And there we have it. And then if I go down, I’m just going to add one of these again, so we can see the effects. I’m going to add this item, let’s say I’m going to add that notice that they all have the rule applied to it, but I’m just going to apply one of them out. And then we could check out the effect on the financials go into the then the balance sheet. I’m going to refresh it running the report again. So we have a fresh report. It’s nice and warmed up ready to go.
And then if we go down we have the Verizon it’s an expense type of form. If I go into it, where basically like a check type of form, Expense Type of form decrease in the checking account, there’s the account, it’s going to expense means it’s decreasing the checking account, closing this back out other side then on the income statement scrolling up back to the balance sheet, go into the income statement, refreshing the report.
And now we’ve got our telephone expense down here building up our income statement, go into the vendors tab because we added the vendor we now have Verizon Wireless as well as a vendor and consider information by vendor. So we’ll leave it here for now I’m going to go back to the first tab and just note that in following months then as we enter data in the following months, you could automate these items with the rules or then you could filter by the rules. Now I could filter by the rules. And then I could just check off these rules very quickly and add them in following month.
So you can see how the following months become more and more automated. Also note, if I go to the tab to the right, that we are building our chart of accounts, if I go down to the accounting tab, and we take a look at the chart of accounts, we have now added to our chart of accounts as we enter the data. So that’s why it can be nice to have a nice clean chart of accounts to start off with and then make a custom Chart of Accounts, you might want to use what QuickBooks provides you and then first see if you’re entering something that lines up to their category that can be useful.
But again, if you want to create your account from scratch, especially if you’re using this for personal purposes, then it might be useful to just build your own expense accounts. If you’re using this, for example, for personal purposes, then your desire on what your account categories may differ greatly than a standard kind of expense category, you might want to know which grocery stores you’re going to or whether you’re going to, you know fast food versus sit down restaurants or this or that.
And your expense accounts may vary. And you could you could make them basically as you go as you as you enter the data into the system. But in any case, that’s going to be where we stop. Now I’m going to and then we’ll continue on with some of these transactions in future presentations.