Bank Feeds Are Not Magic
Updated: Sep 26, 2022
Without a doubt, Bank Feeds have revolutionized QuickBooks bookkeeping. However, many business owners (and even some bookkeepers), put all their trust in the Bank Feed process believing it is remarkably, correct… always and doesn’t require them to lift a finger (other than pressing “add”). Simply put, Bank Feeds are not magic. I am going to go over the top 3 errors I see and how to avoid.
1. Believing That QuickBooks Suggested Coding is “All Knowing.” QuickBooks will offer suggested coding based on text, wording, and detail it gets from the banking institution. These “suggestions” should always be reviewed as many times, they are inaccurate. I see this turn into the biggest mess when it comes to banking transfers, QuickBooks might suggest a transfer to a wrong bank account or many times, it uses the infamous “Uncategorized Asset” account which creates a headache of problems. Take the time to properly review each transaction, add payees if missing and ensure transfers are being booked correctly.
2. Thinking Auto Rules Make Coding Work Disappear Without Saying
QuickBooks Rules are a great way to help avoid #1. Many users, both business owners and bookkeepers love to use Auto-add Rules because like magic, voila, the transactions are added to the register. I say, not so fast. Why? For one reason, auto adding transactions keeps them “out of sight and out of mind." Example of how this a problem: perhaps you cancelled a subscription of some sort, if you had that subscription on Auto-add, you may miss if the vendor continues to charge you. Rules are great, but turn off the Auto-add feature.
3. Not Realizing That Picking the Right Bank, Is Actually Like “Pulling a Rabbit Out of a Hat.” Different banks and financial institutions, have better Bank Feed capabilities. This is an unknown fact to many QuickBooks users, and they end up just opening a business account anywhere. Some institutions will include copies of all checks and deposit tickets right at the Bank Feed! Many you can also download the bank statement directly into QuickBooks to reconcile monthly. This level of detail can be invaluable within your bookkeeping and accounting processes. Always research the bank or financial institution to see how integrated they are with QuickBooks.
Ta-Da! There you have it, my top 3 errors I see in QuickBooks Bank Feeds and how to avoid. If you have further questions, would like a one-on-one session in your file to check your Bank Feeds or inquire about other Services, check out the Book a Call page.
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The information is provided for reference and informational purposes only. Presentation of the information does not create a client-business relationship, nor does it constitute professional accounting, tax or legal advice.