How to Categorize A Bank Statement or Bank Adjustment in QuickBooks

QuickBooks downloads the most recent transactions automatically after you connect your bank and credit card accounts. It seeks them out and tries to match them up with transactions you’ve already entered into QuickBooks. It makes a new transaction record for you if it is unable to find a match. Simply give your approval to the match or newly created transaction.

Note: QuickBooks can save you time and hassle by automatically matching transactions made with QuickBooks Payments.

Step 1: Download the most recent bank and credit card transactions.

Every night around 10 PM PT, QuickBooks downloads the most recent transactions for the majority of banks. Some might require a little more time. To get the most recent transactions available, you can manually update your accounts whenever you like:

• Go to Bookkeeping, then Transactions, then Bank Transactions (Take me there), or go to Banking (Take me there).
• Select Update.
  This updates each of your bank and credit card accounts.

Tip: To continue the update if you see a message requesting more authentication, just follow the instructions displayed on the screen. While some banks don’t demand it, others do for extra security.

Step 2: Analyze and group downloaded transactions.

Select Bank transactions under Bookkeeping, then click on Transactions (Take me there), or choose Banking (Take me there).

•  The tile for the account you want to review should be chosen.
•  Start your review by clicking the for-review tab.
•  Transactions downloaded by QuickBooks are sent to the for-review tab. Review each one separately.

To match, add, or view multiple matches for each, you have the option. Take the actions outlined in each option’s section:

Match with the existing transaction:

When QuickBooks says it “matched,” it means it found a transaction you already entered and the one it downloaded. To avoid receiving duplicates, this links them together.

To ensure a successful match, all you need to do is check:

•  The Match option in the Action column allows you to locate a downloaded transaction.
•  Be sure to take note of the Date, Description, Payee, and Amount Spent or Received.
•  To enlarge the view, choose the downloaded transaction.
•  Examine the QuickBooks matching records. You may already have entered this transaction in QuickBooks as a possible match.
•  You can learn more by clicking the link next to each match.
•  Double-check that this is the right match. Check the fields on forms for the existing transaction in QuickBooks, paying particular attention to the Deposit to, Payment Method, and Bank account fields.
•  Close the open transaction if this matches exactly.
•  Choose Match.

Since you already entered the transaction, QuickBooks now recognizes the downloaded transaction as such. It links the two together to prevent duplication. Your job is finished.

Find out why some transactions don’t match:

Some transactions can’t always be matched to records that already exist. Here are a few potential explanations.

•  The payees don’t match.
•  The amounts don’t add up.
•  The dates don’t line up or aren’t close
•  The transaction has been completed more than six months ago.
•  When you choose the Find match option, you can still find a match.
•  The payment’s bank account is not the same as the bank where the match is held.
•  The transaction has been reconciled.
•  The transaction has already been linked to another object.
•  The exchange rates are problematic for multiple currencies, or the transaction doesn’t eventually pass through the home currency.

Confirm paired bank transfers:

By checking for matches in transfer amounts and dates, QuickBooks will automatically detect outgoing and incoming bank transfers between two of your linked bank accounts.

When a transfer is imported into QuickBooks Online, a suggested transaction pairing will be shown to you, which you can either accept or reject. It will mark that transaction as reviewed for both feeds if the pairing is approved.

•  Select Transactions under Bookkeeping, then Bank transactions (Take me there).
• Verify your paired bank transfers when prompted:
  • Select Record transfer from the Action column to confirm the pairing.
  • Getting rid of the pairing Select the transactions to open the details, and select Unpair. Then, select Categorize or Find match.

To view the settled transactions:

•  Select Transactions under Bookkeeping, then Bank transactions (Take me there).
•  Search the list for the transaction under Categorized.
•  To view the transaction details, choose Transfer to […] in the Added or Matched column.

To edit a settled transaction:

•  Select Transactions under Bookkeeping, then Bank transactions (Take me there).
•  Search the list for the transaction under Categorized.
•  Pick Undo from the Action column.
•  After returning to the for review tab, the transaction can be reviewed as usual.

Add a new transaction:

Add signifies the absence of a matching transaction in QuickBooks. Instead, it used the information from your bank or credit card to begin a completely new transaction for you.

All you need to do is confirm there isn’t a match and give the work your approval.

•  By selecting Add in the Action column, you can look for a downloaded transaction.
•  To widen the view, select the transaction.
•  Take a look at the suggested Category. This is the account that QuickBooks is attempting to classify the transaction under. QuickBooks might advise classifying a gas expense under travel expenses, for instance. Changing the category and moving it to a different account is always an option.
•  If necessary, switch the supplier or client.
  Tip: If you believe that you have already entered this transaction into QuickBooks, choose to Find a match. Examine the list of potential matches, then pick one if you find it.
•  Review and include any additional data that might be required or lacking.
•  Choose to Add once everything is in order.

Note: QuickBooks may occasionally classify transactions as belonging to the Unrelated Income or Unrelated Expense accounts. These accounts are temporary. Whenever possible, classify transactions into income or expense accounts directly.

View and review multiple matches

View indicates that QuickBooks discovered multiple potential matches.

Simply choose the appropriate one, and you’re done.

•  Utilize the View button in the Action column to locate a downloaded transaction.
•  Choose View.
•  Examine the QuickBooks records that match. The potential matching transactions that you’ve already entered in QuickBooks are listed here.
•  To learn more, click the link next to each match.
•  Make certain that one of these matches. Check in particular the fields on forms for the existing transactions in QuickBooks, such as Deposit to, Payment method, or Bank account.
•  Note: Depending on the transaction you are matching, the fields you see may change.
•  Check out the potential matches.
•  Close the open transactions once you’ve located the ideal match.

Step 3: Review the matched or added transactions

The downloaded transactions are entered into QuickBooks after you match or add them. In the Categorized or Reviewed tab, you can check your work to make sure everything is in order.

After your review, it would be wise to quickly confirm the following:

•  To choose bank transactions, go to Bookkeeping, then Transactions (take me there), or go to Banking (Take me there).
•  Choose the tile representing the account you want to examine.
•  The Categorized or Reviewed tab should be selected.
•  To review the transaction, click the link in the Added or Matched column.

Split the transactions between multiple accounts:

For better tracking, you can divide transactions between different accounts, such as a sizable business travel expense.

•  Open the tab marked “For review.”
•  To expand the view, select the downloaded transaction.
•  Change the Find match to Categorize if the Match option is selected in the Action column.
•  Next to the Add button, choose Split.
•  The Split transaction window is then displayed.

Exclude any personal or duplicate transactions

To maintain the accuracy of your accounts, exclude duplicate or personal transactions:

•  Navigate to the For review tab.
•  For each transaction you want to disregard, check the appropriate box.
•  Select Exclude.
•  Transactions that are excluded are moved to the Excluded tab. They won’t be re-downloaded or added to QuickBooks.

In QuickBooks, what does a bank transfer mean?

•  When you transfer money, you are either moving funds from your savings account to your checking account or the other way around.
•  You must transfer money whenever you need to move funds from one account to another.
•  By choosing the option to make a bank transfer, you can achieve that.

What categories do bank transfers fall under in QuickBooks?

How to classify a bank transfer from a single business account to a different business account Utilizing the search bar, locate the transaction involving the transfer. Pick the Advanced Search link. When the Add Filter button is clicked, select Transfer from the drop-down menu that appears next to Search. Find the transaction and click it to open it when you find it.

•  Register a new transfer.
•  Select Add New, and then
•  Selecting the Transfer option
•  From the Moneys Moved Away Using the drop-down list, select the bank account where the funds are coming from.
•  Using the ′′Transfer Funds To′′ dropdown menu, select the bank account that the money will be deposited into.
•  Type the amount to be transferred in the box marked “Transfer Amount”

FAQs

1. In QuickBooks, how do I classify a transfer?

•  Windows’ Quicken application When you move money between accounts, the balance of one account rises while the balance of the other account decreases, but your overall net worth remains the same.
•  When you use Quicken, a transaction will be created in the “transfer to” account register and recorded in the “transfer from” account register simultaneously.

2. Is it possible to classify a transfer under an income category?

•  A transfer cannot be classified as either an income or a cost because those two classifications are mutually exclusive.
•  You are not receiving a payment or making a purchase when you transfer money from one account to another; instead, you are simply doing so.
•  (Instead of an income or spending category, the name of the account to which you are transferring money or from which you are moving money appears in the Category field of the register.)

3. What information must I enter into QuickBooks when I move money?

You only need to tell the program which account the money is coming from and which account it is going into to transfer money between accounts in QuickBooks. The next thing you need to do is let QuickBooks know how much money will be transferred in total. Five thousand dollars will be transferred by me. And really, that is all that is expected of you.

4. In QuickBooks desktop, how do I record bank transfers?

•  Go to the section labelled Banking.
•  Select Transfer Funds.
•  In relation to the Transfer Funds From the drop-down menu, choose the bank account you want to use.
•  The drop-down menu titled “Transfer Funds To” will allow you to select the account to which you want to send money.
•  Specify the transfer amount.
•  The Save and Close button should be chosen.

5. In QuickBooks Online, how do I categorize bank transfers?

•  Using the Search form, locate the transaction involving the transfer.
•  Decide on Advanced Search.
•  In the drop-down menu next to Search, select Transfer. After selecting Transfer, click the search button next to Add Filter to start looking for the transaction.

6. What kind of transaction is a bank transfer?

•  A domestic wire transfer is any type of wire payment that occurs within the same country between accounts held at two different banks or other financial institutions.
•  Inter- or intra-bank transfers can be made within the same nation.
•  Senders may be required to enter a code or the branch number of the intended recipient if they want to complete a transaction.

7. When in QuickBooks should I use transfers?

You can choose to transfer a transaction to a different credit card or bank account if you see a button with the label “Transfer.” For example, you can select the appropriate bank account from the drop-down menu and then click the Record transfer button if you want to record the transactions to a different account.

8. In QuickBooks, how do I enter a wire transfer?

•  Select Add New, then select Expense from the Vendors menu.
•  You can specify a vendor or the location of your purchase in the Payee section (this step is optional)
•  Select the bank account that the wire transfer originated from the dropdown list found in the “Payment account” box.
•  Give the date the purchase was made in the section marked “Payment date.”

9. In QuickBooks, how do I classify withdrawals?

•  Select the Chart of Accounts option after going to the Lists tab.
•  Select the Account option from the list below to start a new account.
•  As the type of account you want to use, choose Bank.
•  Select the Continue option.
•  Describe the account you want to use, if you could (for example, Cash Bank Account or Petty Cash Account)
•  If any additional fields are needed, fill them out, then click the Save and Close button.

10. Are bank transfers considered as cash payments?

When funds are transferred using the same procedure as cash withdrawal from an ATM, a credit card transaction is regarded as a type of cash advance transaction and is treated as such (ATM). You will incur increased interest rates as well as fees for cash advances as a result.