Irrespective of the severity of your business, linking your business bank and credit card accounts to QuickBooks Online is a valuable resource for tracking business income and expenses, whether you are a party planner or a structural engineer. It can save you several hours of manual data entry time per week by establishing a great relation between QuickBooks Online and your business bank and credit card accounts. In your QuickBooks Online bank feeds, this marvelous feature collects charges, fees, refunds, and deductions so that you can periodically categorize and link them to your account databases. Getting a connection means that in your books you rarely miss documenting a transaction. Keep reading this blog to know how to categorize expenses in QuickBooks Online.
Important Points about Bank Review Window
There are some of the vital points that you have to remember about the bank review window. The bank review window contains all the information about your income and expenses of your business.
- Press the name of any checking account on the right-hand side of the toolbar or click on the left navigation pane to reach the Bank Review window.
- Navigate to the Banking menu and then the ‘Banking’ tab.
- The option of ‘Update’ indicates QuickBooks to update your bank’s transactions. Click on the digital automation.
- When you push the Add button, uploaded transactions are not added to QuickBooks. When you click Add, certain transactions are just information collected from your bank by QuickBooks and are in financial reporting void.
Also Read: Enter Billable Expenses in QuickBooks
Steps to Categorize Expenses in QuickBooks Online
By estimating the revenue or expenditure category, QuickBooks Online attempts to assist you with your accounting. Don’t believe that since a category has been estimated by QuickBooks Online that it is the correct group. Reviewing and altering the sections is up to you. The following is the procedure to categorize expenses in QuickBooks Online:
- The “Description” category would not become the name of the payee directly.
- For each transaction in QuickBooks Online, you should insert the payee name or it will not get a supplier accredited to the sale.
- The very last group used by each payee will be remembered by QuickBooks Online.
- If it’s orange, it means that QuickBooks Online recalls a section you used earlier. If it’s black, it means that QuickBooks Online is calculating and it may be wrong with the category.
Download or Update the latest transactions of your bank
- Navigate to the ‘Banking’ or ‘Transaction’ menu.
- Then, hover over the ‘Banking’ tab.
- Click on the ‘Update’ option.
Categorize updated transactions
- Move to the ‘Banking’ or ‘Transaction’ menu.
- After that, choose the transaction that you want to categorize.
- Click on the ‘Categorize’ option.
Also Read: Add a Bank Account in QuickBooks
Categorize the transfers
- In the ‘Transaction’ menu, tap on the ‘Transfer’ option.
- Click on the Radio button for transferring.
- Pick the account to or from which you are moving funds from the drop-down list.
- Choose the ‘Transfer’ option.
Note: QuickBooks Online is intelligent enough to recognize when two accounts are affected by one transaction. QuickBooks Online will Compare the debit or credit you categorized as a payment to the equivalent downloaded transaction in the secondary account affected by the transfer. This means you don’t attach a redundant or repeated transaction unintentionally. These transactions are displayed as a paired transaction in the Bank Summary window and you click ‘Match’ to add them to QuickBooks.
Steps to Categorize the Split Transactions
Listed below are the steps that help you in categorizing the split transactions:
- Click on the transaction that you want to categorize.
- After that, select the ‘Split’ option.
- Enter the name of the ‘Payee’.
- Select the first category and fill out the amount that must contain in that category.
- Then, select the second category and fill out the amount that must contain in that category.
- If you want more than two categories, then choose the ‘Add Line’ option.
- After that, click on the ‘Save and Add’ option.
Categorizing expenses in QuickBooks is a simple and short process that you can easily perform. Yet it is the most crucial task that every business owner with accounting software should perform. For any related queries or technical help, consult the QuickBooks Error Support experts via chat.
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