December 21, 2021
It’s been quite a while since your main choices to understand your bank balances and cleared transactions included your phone and your monthly statements. Nowadays, accounting system and internet let you to connect online with your financial institutions and import your bank transactions.
In case you’re new to QuickBooks or you haven’t set up online banking yet, you may not know how easy it is (financial institutions may vary), or how safe it is. You can connect to one of your banks and import months of transactions under 10 minutes, depending on the volume of bank transactions you have. Moreover, QuickBooks uses high data protection that matches to what the banks use. However, you need to follow your own security protocols on your own computer to avoid any issues.
Being able to access your bank online saves tremendous time. Updates are provided on your accounts daily, and if you recorded the original transactions properly, accuracy is ensured. This instant view of your bank accounts is very helpful to catch quickly any money issues that may arise, to make better business financial decisions, and make future financial projections for your company.
Let’s see how it works!
The Bank Connections Center
All the tools needed to set up and maintain the online banking system in the Bank Connections Center are provided by QuickBooks.
To get started, click on the “Transactions” or “Banking” tab on the left of the screen, then select “Banking” from the list.
In the upper right, click on “Link Account”. A new window will open asking you to select your financial institution from the list or enter its name in the search box area, in case it is not listed.
Some banks do not offer online connections to QuickBooks yet, but most of the large ones do. In the case yours does, a new window will open like below:
Figure 1: A window like above will show if your bank is set up for online connections to QuickBooks.
Enter your user ID and password that is used to log in onto your bank’s account website and click on “Continue”. Know that some banks may require a temporary identification code to verify your identity.
If you have selected the correct financial institution and entered your credentials correctly, it will ask you to select the accounts you want to connect. Click on the account you want to connect.
When selecting your account, QuickBooks will ask you to enter an account type, which will be used to download your transactions into QuickBooks. You may need to create a new one with your bank or credit card name if not created yet. If you are connecting a checking account, select Bank in the Account Type field. Or, if you are connecting a credit card like in this example, select Credit Card. Then, enter an Account Name.
You can also make it a sub-account of another account if you’d like by checking that box, then select the parent account from the drop-down list.
Figure 2: During the online banking setup in QuickBooks, you will need to either create a new account for each bank or credit card account or select one that already exist.
The rest of the fields are optional. You can add an account number if you’d like, but we recommend to not assign an Opening Balance. Just leave the box empty. Once done, click on “Save & Close”.
Once you have selected the account, select a time period of how far you want to pull transactions from. By default, QuickBooks will pull transactions from the beginning of the year. Then, when you are ready, click on “Connect”.
Once done, QuickBooks will display a message saying that your account was successful connected and will bring you back to the Bank Connections Center, where you will see all your bank accounts and credit cards.
Figure 2: This is an example of your account once you have connected it to QuickBooks.
Some financial institutions may interact with QuickBooks’ Bank Connections differently. This example was an easy one. But sometimes, you may need to contact your bank to be able to get QuickBooks Direct Connect set up (Your bank may apply a fee for this feature). Or you may have to manually upload your transactions by using your bank statements. Only thing is you bank statement file format must be in one of these formats: CSV, QFX, QBO, OFX or TXT. And not all financial institutions offer the ability to download bank statements in other format besides PDF. You may need to contact your bank to request them to provide your bank statements in one of these formats above.
On our following topic, we will discuss how to handle the transactions you’ve downloaded into QuickBooks.
Meanwhile, if you need any assistance with your books, please feel free to reach out to us.
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