- August 10, 2020
- Posted by: Dan Gordon
- Category: Accounting Advice
I highly recommend every QuickBooks user to download transactions from bank or credit card feeds into QuickBooks Online (QBO). It’s a huge time saver. Here’s another tool that makes the process even more automated. This process establishes rules that QBO follows. Setting up rules tells QBO in advance how to treat certain transactions, thereby speeding up the download and review process.
How rules work in QuickBooks Online
Suppose you have a vendor you use all the time, such as a local gas station you charge on your credit card or ATM card. When a charge comes in from that vendor, you set up a rule for QBO to follow, such as the account and/or vendor name that payment should be charged to. For example, maybe Mobil/Exxon is charged to the “direct expense: fuel” account.
The rules you establish can work in one of two ways:
• QBO can suggest the rule you set up to charge the downloaded transactions that you review to the proper classification; or
• QBO can identify the transaction, apply the rule that matches the criteria you set up and automatically apply the rule to that transaction. While this may sound a little risky because you don’t review it, you can always make changes after the transaction is downloaded and accepted, so if you process a lot of transactions the risk of miscodings is minimal.
How do you create rules in QuickBooks Online?
- When in QBO, choose the banking tab on the left side.
- Once you are in the banking download screen, at the top you will see “rules.”
- Click the “rules” button. Then click “new rule.”
- Assign a rule name – one that describes what you are doing.
- Identify on the drop-down menu whether this rule applies to “money in” or “money out,” as well as from what bank accounts and/or credit card accounts.
- Choose the “condition.”
- Then assign the transaction type, category/account and payee field.
- The “automatically confirm this rule” button pertains to whether you want to review the transaction first or have QBO code it using the rule established. I recommend all transactions that are not recurring be reviewed. For items such as monthly rent or other recurring transactions, they can be automatic.
- Once you’re done setting up the rule, click “save,” and you have completed setting up the rule.
Once the rule is created, the actions column of the rules page can be used to copy the rule, so you won’t need to create similar rules from scratch. You can also delete rules you no longer want or edit them as needed using the link in the action column.
As technology progresses in the accounting software world, we should be able to save time on data entry, as well as manual decision making for recurring transactions. QBO allows you to do both by setting up rules.
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