Quickbooks Online can automate some bookkeeping tasks. The process of importing transactions via the bank feed is one example. Simply connecting the bank and having Quickbooks Online download the feed does not produce accurate financials. It isn’t intended to do so.
About the Quickbooks Online Bank Feed
Quickbooks Online prompts users to connect their bank accounts. This allows Quickbooks Online to automatically pull the bank transactions. Quickbooks does this by taking the data as presented by the bank. This data may or may not be complete.
It should also be noted that the bank feed is not the only way to get data into Quickbooks Online. Data can also be imported or entered manually. Quickbooks Online provides sample spreadsheets that can be used to structure the data before uploading it. There are also add-on applications that allow bulk uploads.
Reviewing the Quickbooks Online Bank Feed
One of the problems with the bank feed is that it can lull users into thinking that the data is complete. Users may simply click “add” on transactions without really reviewing whether the feed has the correct information.
This often results in uncategorized income and expenses. A category is simply a label used for a type of income or expense. Office rent, utilities, and wages are expense categories, for example. These categories are not added by most banks. As such, the data sent to Quickbooks Online by the banks does not include this information.
If the business or bookkeeper does not add this data to the bank feed data, the financial reports produced by Quickbooks Online will be incomplete. Many business owners do not discover this until they provide the data to their tax advisor just before time to prepare and file their tax returns. Unfortunately, this requires either the business owner or bookkeeper to have to go back and categorize these items. This can be a big distraction at tax time.
That the bank feed is always pulling data can also be problematic. It often results in procrastination. Businesses think their books can wait as they have the data and just need to find time to work with it. The problem is that the business owner never finds time to get back to the books. Transactions add up over time. When the business owner finds the time to work on the data, too much time has passed and he or she is not able to easily recall details related to the items of income or expense. This makes it much more difficult to accurately classify items of income and expense in Quickbooks Online. Had the business owner kept up with the data–even if it is just spending a few minutes a day on it–the process would be much easier.
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