Are you experiencing challenges with credit card payments and reconciling transfers in QuickBooks Online (QBO)? These common pitfalls can lead to headaches during reconciliation if not handled correctly.
Let’s back up a bit here. In QBO, when there are transfers or credit card payments (a specific type of transfer), there is a high likelihood that these transactions will not be posted correctly. There have been updates recently that attempt to address this issue which shows that not only is it something they are aware of through feedback, they are moving to address it! Yay!
What happens is, you’ll be attempting to reconcile your accounts, and there’s a transaction that was a duplicate, so you delete it. Cool. Then you attempt to reconcile another account, and suddenly, it won’t reconcile. What happened?
Let’s break it down. In QBO, each account is its own box of data. Picture a box of beans. When you transfer funds from one account to another within the company, you are moving one bean out of Box A and putting it into Box B. QBO sees this in both boxes; it sees a transaction in Box A showing the bean moving out and it sees a transaction in Box B for the bean moving in. The problem is that QBO does not know that these are the same bean. We have to tell QBO that this is the same bean. We do that by utilizing the Record Transfer function.
When the transaction comes up in the bank sync, sometimes the blue link on the right actually says “Record Transfer”. Usually, there will also be a green box in the middle with the words “Paired to Another Transaction”. This is your first sign to stop and pay attention.
QBO has noted this as a transfer, we need to confirm it matched the correct beans. You would do this by reviewing the transaction info; “open it” by clicking on the transaction so it drops open and gives you more information and options. This allows you to review the fields to ensure the correct account was noted as the “To” or “From” account.
Once you add the transactions as a Transfer in one account, it should “Match” it in the other account – meaning, when you go to the other account on the other side of the transfer, you won’t see any transaction pending. If you look in Categorized, you’ll see the transaction added as a transfer.
This is what you want; it shows that QBO recognizes these are the same transfer and will only record it one time for both accounts.
Occasionally, you’ll see the transaction with a green box and the words “1 Match Found” on the transactions and the option to click a green button with the word “Match” on the right. This won’t always happen, usually only when there is a slight discrepancy in the date or something like that.
It is the same for a Credit Card payment. When paying on a business credit card from a business checking account (for example), you are essentially transferring money. However, QBO gives us a different option for this special kind of transfer and it works basically the same. When you “open” the transaction, there is a fourth radial option across the newly opened section and the one furthest to the right will say “Record and credit card payment”. When you click this radial, the fields will change and you’ll be able to select the correct credit card account from the first field drop down, then click Add. Then, when you go to the sync for the credit card, you should see the options to “Match” the transaction.
Best practice is to post both transactions consecutively. In other words, do not add five transfers from the checking account, then go to each respective account and add them from the “other side”; this can confuse QBO.
Instead, if you have a transfer from Operations to Payroll, click the transaction in Operation and Record Transfer, then go directly to Payroll and enter the “Match” . Next, go back to Operations and enter the next transfer to Savings. And so and so forth.
Taking this extra second to toggle between accounts will save you a lot of headaches later when your accounts reconcile seamlessly.
