08.27.2024 - Reconciliation Best Practices and Tips

Matthew Fulton joins us for what looks to be shaping up as a series on Bank Feeds, but we will begin at the end - Reconciliation and look at Best practices when reconciling Bank and Credit Card accounts and discuss some tools that will help make this critical process much smoother.

QB Power Hour is a free, biweekly webinar series for accountants, ProAdvisors, CPAs, bookkeepers and QuickBooks consultants presented by Michelle Long, CPA and Dan DeLong who are very passionate about the industry, QuickBooks and apps that integrate with QuickBooks.

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Transcript

Dan DeLong: 0:06

You are listening to the audio portion of the QB Power Hour webinar series. The QB Power Hour is a free, bi weekly webinar series for accounting professionals presented by Michelle Long and Dan DeLong, who are very passionate about the industry, QuickBooks, and apps that integrate with QuickBooks. You can find out all the details about the webinar series at qbpowerhour. com. So without further ado, here's Michelle and Dan. Welcome, everybody, to another QB Power Hour. We are talking today about bank reconciliations in QuickBooks Online. Very exciting stuff, right? Because that is, that's what we're here for, right? that is like the, Michelle, what would you equate bank reconciliations or just reconciling accounts to in a hierarchy of things?

Michelle Long: 0:59

It's like the core of our business a lot of times. It's One of the central things that we do to make sure we've got all the transactions and that things are in there and it's one Of the starting points to getting everything in there. So

Dan DeLong: 1:16

yeah, I mean it's if you're you know the old saying of Counting beans, right? That's what that's where the rubber hits the road

Michelle Long: 1:28

carolyn says it's like washing the dishes, something you have to do all the time.

Matthew Fulton: 1:35

I remember when I first got started in working with QuickBooks Online, reconciliations were the absolute bane of my existence. I hated, them, especially in the old, system. It just took forever and just, it was a nightmare. And we're going to show today like how it's so much easier. It's going to be pretty cool.

Dan DeLong: 1:56

As, the elder statesman in the, on the panel, Michelle what, was that like?

Michelle Long: 2:03

Now I don't like this elder business experience, maybe. It is amazing. It is amazing how far bankruptcy has come. I talking about bankruptcy, it just reminded me, speaking of elder or experience in my very first internship that I had with Hallmark cards, which I'm talking about Hallmark corporate, the private company. It would be a fortune 500 company if they were public. But anyway, so my first job I was reconciling a bank account This was back in the manual days, you know his mainframe system manual days Anyway, I was off like ten thousand dollars on this account and I couldn't for the life of me find it You know, I had checked everything and this was old days where you got your ruler and your cash Vying through things and checking them off to the bank statement the old fashioned way that we had to do it the hard way I couldn't find it. I was off like ten thousand dollars. So I went and asked my manager, Hey, can you help me with this? He was like, ah, it's good material. We'll look for it next month My first lesson in immateriality was 10, 000 on a 2 million bank account was immaterial. It was like, no big deal, we'll just look for it next month. I was like, oh my gosh! But look how far bank records have come to where we are today, where it's at. Pulling in the statements is pulling in this whole bank feed automating this transaction. And now it's pulling in bank balances in the month for us and doing the reconciliation for us. Wow. Yeah, literally.

Dan DeLong: 3:40

I was telling Matt when we were preparing for, this this, webinar is that, I literally reconciled six months of a, of an account. In less than a minute, with the tools that are now available, it's amazing how far it's come, there's Casey.

Michelle Long: 4:07

Sorry. Casey said it took 10

Dan DeLong: 4:10

minutes. He's

Michelle Long: 4:11

shocked, too. I can't believe it.

Dan DeLong: 4:16

Alright, let's go ahead and kick us off here. Go ahead, Michelle.

Michelle Long: 4:21

Hi, everybody. I'm Michelle Long, CPA. Frequently, or formerly, newly retired. Figuring out what I am these days. Former owner of Wands for Success. I actually, I still own it. Actually, my whole career, I've wanted a jewelry client. I finally got a jewelry client. I couldn't say no. I'm going to wind up paying him more than he ever pays me. Anyway, I've got all kinds of projects lined up with my new plan and I am getting him set up and going You know, that's the great thing about being retired. You can decide what you want to say. Yes or no Anyway, i'll get him going and then i'll turn him over to my son. For the ongoing work, but anyhow, that's enough about me. Dan, go ahead.

Dan DeLong: 5:11

Dan DeLong, owner of Danwith and School of Bookkeeping, working worked at, not working worked at Intuit for nearly 18 years and co hosting today as well as the Workshop Wednesdays over at schoolbookkeeping. com and doing some tech editing for some of the QBO book and QuickBooks books that are out there and joining us today Friend of the show.

Matthew Fulton: 5:37

I need a haircut. Otherwise, I'd look like that, but I'm still Matthew Fulton My friends call me Spot, founder and owner of Parkway Business Solutions You know, we focus primarily on workflow design still do a bunch of accounting, but highly, specialized and I helped click the light switch on for QB community, like the Facebook group, but they're the ones that keep it going. Of course also, which kind of ties into some of the stuff today is I am a workflow consultant for ledger sync. It's an application that actually helps you grab all your transactions, your statements, and your images. So you can have everything on one single dashboard for all your clients and very, happy to be here and be a guest co host. Thank you guys for asking.

Dan DeLong: 6:20

Appreciate you joining us here today and the, sweetening that you did on the presentation slides is forever. I'll forever be in your debt because I'll be leveraging the the consistencies that you've done here. So appreciate that. A little bit the QB Power Hour. It's every other Tuesday at 12 noon Eastern. This one is not eligible for CPE Credit but the first one of the month will be with our friends at Baker's Hub will be our CPE sponsor, but this one is, not. So we just wanna make sure that everybody's aware that even though it's a great topic and, and should be we just wanna try to make it a, an easier. Act option of just that first one of the month, whatever that happens to be, would be eligible for CPE credit. And if the links there, and I think put them in the chat for today's, for today's slides the, landing page that we have set up for, today has the the handouts and we'll have the replay and the podcast and whatnot. But if you go to qbpowerhour. com slash resources, there's PDFs and recordings of all of the of the prior QB Power Hour webinars. so much. A little bit of housekeeping if you have specific questions about something that we're talking about here today, please put them in the Q& A, and but if you just have general general things about what is, what do you equate bank reconciliation to, put them in the comments in the chat, right? And we are simulcasting, which again, it reminds me that I didn't Do this. I'm okay. I've got to do that. Once we transitioned over for our first poll question, but on the Facebook group into the QB power user group, if you're watching there, whenever I do put it in there, you'll want to make sure that the streaming platform that we're using has access to your profile. So we know who you are when you if you happen to say something in the group there while we're streaming. And thank you, Matt, for putting the, putting me in a pink hat because. We do have a QB Power Hour store with some swag and I, do look pretty good in pink there, I think.

Matthew Fulton: 8:50

Bringing sexy back, for sure. Loving it. It's

Michelle Long: 8:54

a great color on you, Dan. I think it looks awesome.

Dan DeLong: 9:00

Check it out if you want, and you can, you too can have your own pink hat. Alright, so our agenda today we're going to be talking about just reconciling in QuickBooks Online. Alright. In general, some common challenges some specialized workloads. Mark Matt, Matthew, excuse me. I was thinking maker is Mark and not wanting to say maker is Mark. And then I threw in Mark for Matt. Oh my goodness. One of those days. But we have some Matthew has some specific workflows to help out with with reconciliation, and we have some helpful tools and hopefully if time, permits, we have some QA time. I'm going to stop sharing because we have our, first poll question. How frequently are you much time are you spending, average in a month, reconciling accounts for clients? And I'm looking for the poll question. There we go. Launching. Okay, and I'll launch that and I will stop sharing so Spot can pick up.

Matthew Fulton: 10:06

Doing as we speak. And Michelle was telling us earlier that it's her fault, actually, that you were That's right. Everything is Michelle.

Dan DeLong: 10:21

She is the, she is more than the goat. She is the goat. Not just the goat only counting, she is the goat for all the goats around

Michelle Long: 10:31

today. No, it's funny though. You know the Taylor Swift song, Me, I'm the Problem? That's me today. No, I don't. You obviously aren't a cheese fan then, because if you're a cheese fan, you have to be a Taylor Swift fan too. I wasn't a big Taylor Swift fan until she was Kelsey's girlfriend, and now I am a big Taylor Swift fan, too. And I can't wait for the tea season to start, which, by the way, Dan, we gotta get some bets going again.

Dan DeLong: 11:01

Yeah, exactly.

Michelle Long: 11:03

But we don't play your team this year, I don't think.

Dan DeLong: 11:07

It sounds like you're scared.

Michelle Long: 11:10

No, I just don't remember. I'm just trying to remember, but I don't think we do. Anyway, sorry. Back to reconciling. Yeah,

Matthew Fulton: 11:20

and so to answer the questions in the chat I, made these polls in my, head. I was wondering like I said before, the reconciliations used to take me so much time and I was wondering how much time it takes, on average for you to, reconcile your accounts for all the accounts for one client. Hey, you can have two accounts. You could have 10 accounts. It just depends on the amount of time spent.

Dan DeLong: 11:47

yeah and there's, definitely other things other than financial institutions that you could want to reconcile yourself, like clearing account and those types of things. So it could certainly could, add up more so than than financial institutions. So, let me go ahead and end the poll here and I'll share the results. It looks like, Majority is 15 to 30 minutes per client. If you have a pretty, if you have a lot of clients, then that could certainly certainly add up as a lot of time, of the day.

Michelle Long: 12:24

I would venture to guess too, a lot of that time is spent going and getting the bank statement. Now that we have the statement there, or the balance there, I think the time spent reconciling is going to go down in a vast number of clients. Not every client. There's always the exception to the rule. But I think a lot of that time is going to be reduced.

Matthew Fulton: 12:45

What do you guys think? I definitely agree. Having worked with an application that's been fetching statements for so many years, trying to get this to be a consistent process of automating that fetching is extremely difficult because the different institutions change how it's done all the time. So we we actually touch base on that through some of this. And I will give the full disclaimer to everybody that's here. If you know me I love to try to share as much information as possible. So this is definitely a decade. That's worth downloading because there will be additional information. I've got some workflow tip things are added in that we can go through somewhat quick to always make sure we have enough time for your questions to Q and a at the end, but definitely take the time to download it. Michelle, you brought this up real quickly earlier. There's so much more that you need to reconcile than just your basic checking and savings account. The credit cards as well. So financial institutions, I say it that way because it's, all of that. It could be loan accounts as well. Clearing accounts, of course, especially when you're using third party apps. I'm a firm believer, when in doubt, wreck the account. The account, and I don't mean wreck it as in w I mean wreck it as in reconcile. No wrecking it,

Dan DeLong: 14:01

Ralph.

Matthew Fulton: 14:02

Yes, exactly right. And some of the tips and things in here have to do with our accountant tools just in case there are those who are just being introduced to those report options. In there you can see when all your last reconciliations were done very quickly and easily. And at the top you can even change your dating of all your common reports. Super important to know as well. But this is where the real fun comes into play, right? It's the automatic statement fetching. So this new functionality. They could

Dan DeLong: 14:32

have used a dog for this icon,

Matthew Fulton: 14:38

You want

Dan DeLong: 14:38

to play fetch or

Matthew Fulton: 14:40

dog names would have been great. I would have actually been honored that way. So, one of the key things. Not all financial institutions are supportive for the fetching. That's one challenge. It's, evolving and it's growing, but if they don't support it, you still have to go get this stuff. And then also keep in mind, the logging credentials have to be good. So in the chat if you have a client that is so wonderful and they love to change their Banking passwords every two weeks because they can't remember their password say yeah, that's me i'm sure we've all got those which cost us tons of extra time and energy Now the cool thing with this though is If you've cleared the bank feed and you've done your last reconciliation These bottom windows here statement ending date and ending balance will auto fill in You All right. So I decided to make this in two minutes, so that you can see what you should be doing. So both parties want to ensure that your families or loved ones are done. I can do more on mental health claims, one of the things is when you get a look at all of the documents, I would like you to go over the document that you're going to be checking in so that you can see exactly how they're divided. Thanks. The balance of the deposits you're checking the dollar amount you're checking the dollar amount of the money in the money out each and The number of transactions because remember I could do a plus 10, 000 here and a plus 10, 000 here and it would still reconcile and now you have two extra transactions that shouldn't even exist there. So you've got to really look at that part. Shortcuts lead to long year end closes. So be very careful. Michelle, Dan, before I go a little further, what other kind of like common challenges do you think will are that you've seen the most out there as well as the chat? What are the common challenges you all have seen?

Dan DeLong: 16:49

The biggest thing and when I was in my 18 years talking to small business owners and accountants added to it was that opening balance not being what it was when they, reconciled it last month that was just a large call driver, right? Because you reconcile it one month, you would expect the ending balance to be the opening balance the next month that you go and. Do that. It was, a, reasonable expectation what that, that happened, the, thing is that opening balance is one of those fundamental truths of, QuickBooks that I would call, tell people is that it's just the sum of the reconciled transactions in that account, when you go to reconcile, it is not pulling from history, right? It is just. It is one of those things that is recalculated when you go to record stock If and one of my coworkers said something to a customer and it's always stuck with me. That opening balance, especially in QuickBooks Online opening balance is like a pirate shit. There's ours in there. right? and that's all it's doing. Is is adding up all of the transactions that are ours that are in the register and putting that in there and if it doesn't add up.

Matthew Fulton: 18:23

That's my quote of the day. That's a

Michelle Long: 18:25

good way to remember it. Yeah, I

Dan DeLong: 18:28

like it. And it was easy for me to remember that way. And it's always stuck with me. And that's

Michelle Long: 18:34

the

Dan DeLong: 18:34

fundamental truth about that is that Regardless of what you expect it to be right because you reconcile the last month that opening balance is just a recalculation when you go into this of everything in that register at that moment in time that has an R on it in and that's what it's going to be. You can do the same thing, but run a report outside of it. you for transactions that are reconciled and that should match what's showing up in your opening balance, right? So that is, that was the biggest challenge. I think when it didn't match is now, hunting down what changed and that screen that says, Hey, it's not ready because it's different. And it gives you a little bit of. Breadcrumb trails to go down. It's really part of it. It's a challenge because there's a variety of things that change. And that's what I would tell people is that something changed from the time that you recognize how that today. That there's no longer an R in there that was there before or there's an R in there that shouldn't be there That wasn't there before

Michelle Long: 19:51

and that's one of the things I would like to give into it kudos for giving us that where it says Stop, wait a minute. Your beginning balance has changed and here's the transactions that have changed It allows you to go in and find them because that saves us so much time that we're looking for Or the way we had to in the past, one of the other common challenges Matt, that screenshot we had, there was brighter or Dan, whoever put it in there, it showed a couple of zeros at the very beginning of it. And as Matt was saying a while ago you want to also reconcile clearing account, have clearing accounts. So when you have a transaction where. You know you're doing a zero dollar expense or a zero dollar check or a sales receipt This is zero dollar sales receipt or whatever the situation is and i'm not sure what those were from People will just leave them there forever They forget that you're supposed to clear those things off and that's one reason why we use a clearing account We don't want them in our main checking account. So clearing up those kind of things out of here as well as old outstanding checks that Who knows what happened to them? Were they duplicates? Were they voided? Were they You know, somebody lost them and never cashed them researching and finding out what happened to them. And what do we need to do? Clearing out that old stuff that's there. I've gone in sometimes where you have to scroll down like 50 of those before you even get to any of the real stuff so cleaning up some of those things before you even get started is some of the main challenges too. So anyway the point about the clearing account is good when to keep that out of the main checking account too.

Matthew Fulton: 21:34

So I asked that question on purpose because I figured you guys would land on a whole bunch of these without necessarily even seeing what we'd already put in here because it's more fun to have the conversation about it than you guys all just staring at slides. So missing there's the things I have in here right off the bat. If you've got missing transactions. Guess what? You really have nothing, no other choice, but to first do a search through your magnifying glass. And I have QuickBooks pulled up back behind. I can go to that in a moment to show things, but there's so many nuances here to try to have them all prepared. It's difficult. So if you've got the missing transactions, do a search, try to make sure it didn't get into the wrong account, because it's easy to be done. And if it is, if you can't find it anywhere, Double check. Also that it wasn't multiple transactions combined together into one larger amount or, the other way around as well, maybe the bank has multiple transactions, smaller amounts, and you can bind them into 1. these are the little pieces that Dan likes to call bread crumbs. I like to call horrific rabbit holes that have you ending up in nowhere frustrated on a zoom with your client saying, you promised me this would be easy. You told me. Oh, this shouldn't be should be really easy for you. Famous last words. Right? Michelle, you nailed the clear, the clearing the uncleared transactions in my mind when I'm doing a reconciliation, every single transaction, it all, every one of them has a story. So their story is either been told or it's still pending there. But if there are 0 items. Still take a peek. Make sure there's a reason if you're the only one doing the books in there and you're cool that you can clear them out. If you're getting in fresh and brand new, I will usually leave them for the first time to see if I'm missing something else and need to tie it back and the memo notes or something help me better understand it But you want to get those cleared out so there's less junk in your way two little tips if you still have people writing checks get them to have the bank put on their void after 60 days Because it's going to make it to where, legally, you don't have to honor it after 60 days. You should always go longer than that, of course. But it gives you the ability if it's been an extra 3 4 months, you can void those. Do the the proper work around to show it's still owed. But you can void it and get that area cleared out. And then the last one is right tool. He Hector made a really cool, we worked together and created this unclear transaction reconciliation lookup, where if there are certain ones in there, you can click on, and it will pull up a different tab for each one. It's help you search them to try to find it faster.

Dan DeLong: 24:22

Nice saving precious seconds

Matthew Fulton: 24:26

as Hector would say. Dealer duplicates, this is a big one and there's so many different ways this could go, but I wanted to try to highlight the green box and guys sent some color blind and that is green, right?

Dan DeLong: 24:44

That is green. Yes.

Matthew Fulton: 24:46

Okay. So the green box means it came through either a bank, basically through the banking center. You either imported transactions in or a bank. Bank feed was connection connected and it used it to pull the transaction directly. That's how you get the link to transaction towards the top left on the transaction itself. And the ones where they don't have it is where something was manually entered. So if you're doing this and you have you've got to do your research, check it out. What I would actually do in this scenario is I'd go back to this specific one with the green box. I would go to edit, and then I would delete it, to where, because it's linked, it goes back to the bank feed area. I want to slow down and stress, if you delete the manual one, it's gone. If you delete a piece that's been connected through a bank feed, it goes back to the bank feed. Because then you can match it, And you get the green box on the one you manually put in.

Dan DeLong: 25:48

Tidying it up with a bow. Putting a bow on it.

Matthew Fulton: 25:51

A nice green bow.

Dan DeLong: 25:52

Yes. That you can't see if it's green or not.

Matthew Fulton: 25:56

And then, To do, exactly, To do and undo, or whether you should or not undo reconciliations. This

Dan DeLong: 26:05

is some Shakespeare going on here

Matthew Fulton: 26:08

to undo. That is the reconciliation, something like that. I cannot stand when I have these extra little things back behind here. Even though it's, completely fine. You'll notice on this one here 1130 with the minus 2, 500, Dan, you talked earlier, Michelle, you were talking about the fact like your beginning balance is off, right? And you need to fix it or bank feed broke. You need to reconnect it and being a helpful, they decided that they would actually put another opening balance in there for you and that automatically reconciled. So some reason your tolls are off when you have these, if you put, I, every time I'm jumping to something new to do reconciliation, I will put the same ending date as the last reconciliation and the same ending reconciliation balance, the proper one, pull it right back up and first see if there's anything just sitting inside there. Okay. And you can do that same trick, click off anything that is pending there that should have still been reconciled, and very quickly click the button and make it to where it gets to the right balance, and now you get your zero. Only thing is, you do it a whole bunch of times, it starts looking ugly. So as accountants, we have that batch undo to get back to those. Just be sure if you don't have these statements as attachments, take a screenshot of it first, because it's telling you the ending balance and the balance, I'm sorry, the ending date and balance. For each of the months so you can go back and do those wrecks really quickly because theoretically, you know that the transaction stuff should be there.

Dan DeLong: 27:46

Yeah, the one one thing about undoing that I want to caution people about Is the fact that? undo Just undo Undoes what was done during the reconciliation, right? So if you do something outside of the reconciliation, it will not get undone. So if you, do go reconcile a transaction in the register, or if you added something to make it work, that especially after the fact, undoing doesn't make it work. Undo that, right? So when you connect the bank feed, for example, and it pulls in a balance that's reconciled and it puts a transaction in the register, that transaction is not going to be touched by an undone, undue process. Yes,

Matthew Fulton: 28:43

I'm going to pull up the poll as I do that. Lisa is the audio better by the way. Hopefully that will help get it a little bit louder for you to standardize it. So our next poll we're ready for right? Dan?

Dan DeLong: 28:54

Yes, which one is what percent? Let's see, gotta find it now. All right. What percent of your accounts are you able to do by automatic statement fetching? Oh

Michelle Long: 29:06

this

Dan DeLong: 29:06

is such a great thing.

Michelle Long: 29:09

One of the things in that reconciliation history that you were showing, one of the things that I like about that is, I think it was there where it will it was in the reconciliation history I'm, sorry I wasn't there in the reconciliation history where you can see where you previously reconciled and it shows that The statement date and like when you reconcile it will also show if somebody forced the bank reconciliation and so it will show like the statement date The ending balance, and if you forced it to reconcile, it'll show the amount that went to miscellaneous discrepancy or reconciliation discrepancy. Anyhow, I had a client that kept doing that, but he also knew. That if I saw something in reconciliation discrepancies on the P& L that he was in trouble because that he forced the bank reconciliation because I told him he's got to reconcile every month, right? So he would click reconcile now and let it go to recognition discrepancy and then I'd call him up and yell at him, undo it, make you fix it. And redo it correctly and stuff. One month he decided he was going to get smart, he thought. He went in and founded Reconciliation with Prophecies and moved it to office supplies. And I called him up, and I was like, David you did it again. You forced that bank reconciliation. He says, how did you know? I said I told you I know everything Because that report or that screen where it says the reconciliation history Will still show you When they forced it, even though the little booger went in and changed it from reconciliation Discrepancies and moved it to office supplies. I still could see in that You area when he forced the bank reconciliation. So even though your client tries to pull one on you, QuickBooks helps you stay one step ahead of them.

Dan DeLong: 31:06

You're like Lord Morris. You have little birds in, in, in QuickBooks that tells you. Tells on people.

Michelle Long: 31:15

So there are these little tools that we take for granted that are very helpful when you have sneaky clients.

Matthew Fulton: 31:24

Okay, and it looks like we've got 100 percent there.

Dan DeLong: 31:27

All right. And yeah, it's, the biggest one is 55 percent of zero to 19%. And I think I saw in the comments that it's unreliable. Some of the, things about about statement fetching in general. And we'll talk a little bit about maybe some of the tech behind that. But, but yeah, it's when it worked. It's great.

Matthew Fulton: 31:56

It's a good point. Yeah. so let me go back to our share here and so the next area I really want to share about is specialized workflows and One of the things that drive me nuts in the program are the transfers and the credit card payment options Transfers are always the problem Always the problem you need to make every time you have it and because it's trying to link to two different pieces I've seen where somebody's managed to match four transfers In one account to one transfer on one other side somehow And things and balances get completely knocked off and it's just very difficult to find those unless you undo them And really like it becomes faster just to get rid of them and put it back in But i'll show you some tricks that I have on that Additionally, deposit detail reporting. I've got the way we do deposits. I feel it's a little bit of an extra step, but it saves a lot of time. It helps you capture any situation where an owner is investing money in the business or taking it out. And then of course, you've got your merchant processing. If you're using external merchant processing, are they batching transactions together? Are they taking the fee out at the same time, or is it a separate fee? Your third party applications the order in which you do all of anything with the third party apps becomes super important So for the this is one that i've been talking about this forever, especially with bank rules It makes the most sense to do this Why the way we do every transfer is we will create a vendor every time we create a clearing account first And then we create a vendor that will be You Transfer to one, two, three, four transfer from five, six, seven, eight, where the last four digits of the last four digits of the account that gives me the ability to create money in money out rules and you set it up where you've got multiple parts of bank text. It's always bank text contains transfer to. The next one, the numbers, and by doing this, it goes from one into a clearing, out of the clearing, to the other, and because of the rules, it's just as efficient as the transfers, but you get names on all your transactions, and you get to see the in and out very easily. So you can go back and reconcile this stuff very fast. I can't

Dan DeLong: 34:36

see that easily at all

Matthew Fulton: 34:38

But

Dan DeLong: 34:44

I think that I want to talk a little bit about you know The challenge right of what you're talking about Because this is a unique situation where you have potentially both sides of the transfer connected in your bank feed and those rules Thank you it really gets And, it, really who, acts on it first, right? So if it's a savings account that automatically puts it in through the, to the checking account, because you've set up a bank rule to do or the checking account, the savings account or credit card to the checking account it's whoever gets to it first. And then it causes other challenges if it's not a transfer what am I doing seeing a deposit with a negative amount. In my checking account, right? Because it's, money coming in or out and it gets recorded as a deposit or an expense that is adding money to a, register. It can just look really confusing, especially if you're not expecting it to be that way. So I really like what you're, talking about here with setting something up in between, as a go between. So that. You can take advantage of those rules, and then it really doesn't matter what kind of transfer what kind of transaction it is. It could be a transfer, it could be a deposit, it could be an expense, it could be a check, or whatever, right? And then it's fine to, from that account perspective.

Matthew Fulton: 36:17

Yeah. The worst part about this, I cannot tell you how many times I've caught new accounts we were never told about because of doing it this way. That's the best and the worst. It's the best because you caught it. It's worse because now you have historical stuff you have to put in. You have to have the conversation like you, what do you mean you ordered, opened up three new credit card accounts. You didn't tell me about it yet. So it, again, if you're doing it it's, going to zero itself out every time. So at the end of the month, you have to reconcile that account back down. If there's anything left, either somebody invested money in the business, or they took it out to a non business account or an account is missing. So my logic to that part michelle, what are your thoughts there?

Michelle Long: 37:03

I think that's a great process to follow and that's the most important thing is to have a process And do it one way all the time consistently because that helps eliminate duplicates Otherwise you're doing it from this account and from that account and then you're getting duplicates and all that So I think that's

Matthew Fulton: 37:20

a great tip though. Thank you for sharing

Michelle Long: 37:21

that

Matthew Fulton: 37:22

put all the problems in a bucket,

Michelle Long: 37:23

right?

Matthew Fulton: 37:24

so Love it. So I already talked about this piece that by doing it, it gives you the different Having it. I always do all the transferables as a vendor and having names on it Every transaction should have a name every single transaction Because if you have problems or challenges, you have to do the research you have more tools to do stuff The next one I wanted to go into is dealing with deposits. And this is, again, this is a unique one. The ultimate goal here is we have to be able to do the reconciliations. And a lot of the times duplicates, as we mentioned before, can come into play. Because if you have multiple payments by customers combined into one deposit, your bank, if you accept the bank feed piece that will match that comes in, but then you have your undeposited funds and starts growing, right? Everything else. Or if you're creating multiple deposits, one for each person, they're never going to match easily. And it drives me nuts when you have. Three different individual deposits that are selected because you remember that those matched to the one single number. But if I ever have to come back later and I'm doing it, I'm not going to know it. So we create an account I call revenue query. It's just because you can't create rules for uncategorized income unless that changed recently. And what it allows me to do is basically take all of my deposits quickly and toss them right into a revenue query account. Then, with all this stuff put into the bucket, I can come through, and as part of my end of the month close process, I pull up a deposit detail report, and I can then have pull up all the different images, if there's multiple checks, and go and actually check off the correct pieces that tie into it, and spe you like, spend down that revenue query.

Dan DeLong: 39:21

And what type of account is is, Revenue Query?

Matthew Fulton: 39:25

It's a different income account, so it still sits up in the, basically it sits up in your income area. Because when you, when it's in there, you know that's always supposed to be knocked down to zero, is the, whole point. As you start to spend these down, it should equal the same amount when you put it to Revenue Query in the bottom. So you've got revenue query. When you do a, you go pull up your deposit detail. If it's not broken down with the names in here is so vendors, if it's a refund would have a name as well. You click on the top line. You would then come in, find the pieces, check them off. And then come down here click off the trash can get rid of it doesn't break the reconciliation So you can actually go through clear out your bank feeds reconcile And still go back and clear this out before you finish your month end all the way

Dan DeLong: 40:21

You're getting some kudos in the chat there. That's nice

Matthew Fulton: 40:25

It's such a big It just helps save so much time because the other part of this also is This is the same kind of a concept that if you're using a stripe or something else and you have a customer sales receipt for 350, but the amount that came through the deposit was 345, you can actually do check off the 350 merchant fee at the bottom minus five. Now it pops it right back in, didn't break the reconciliation, saves you a bunch of time. It's all about getting these different problems in a controlled bucket.

Dan DeLong: 41:07

And, somebody mentioned in the chat and don't peek at the P and L because your, revenue will be overstated. How do you coach your client about that? Because then you can look at it and you, at least you know what you're looking for, but how do you avoid questions from the client? Wait a minute, what's this revenue query? And do you Just frame that up upfront.

Matthew Fulton: 41:31

Yeah because usually when I'm having to do more of this, it's because they're not getting sales receipts or invoices in on time to be able to match things right away. And we always try to, we train them and let them know what we're doing. So it's a don't stress on this until. This is the other option where most people would do this is they put this into ask my accountant or ask client name and now you have deposits in an expense and It's weird. Do your financial still work the same? Yeah, but it's wonky. So I Like it up at the top because it's a spend down if it's a cruel based and you haven't created any of the sales receipts or invoices It's still right if it's cash basis and this stuff isn't in there. It's still right. It's only when you're actually having both the invoice in there and On a cash basis, right? And then you've also got the revenue query That would double your income until you spend it away to match the payments. That's it. I think I said all that Michelle?

Michelle Long: 42:45

Yes, that's right, sorry, I was looking for the mute button. Yes, that's right, but I wasn't listening closely because I was also talking about sheet laws in the chat, or on the Q& A, but yes, that sounded correct.

Matthew Fulton: 43:01

So we're pretty close. I think we're doing okay. Time wise on all this stuff here. Let's see here. So then the last part again, syncing with third party apps, we could be here for the rest of the day and talk about a lot of these different things. What it all comes down to is truly understanding what the workflow is. This is why I like doing workflow design is figuring out, okay, The beautiful thing about QuickBooks Online and cloud based accounting is, it's a database in the sky. And they can allow different apps that specialize in different areas to connect and handle the hard parts of the workflow. You just need to make sure which data gets accepted first through the banking area so it can match correctly. So again, like a A2X for e commerce, a bookkeep's going to create journal entries. When you do your mapping, you want to make sure whatever is hitting through the journal entry, Always try to make it match exactly what's the bank the actual bank feed. It just makes you a lot happier that's pretty much the same for all of these different type of programs Just keep that in mind and will help save you a lot of time.

Dan DeLong: 44:11

Yeah, and when you've added more More, apps let me launch the poll and I'll talk about that. Which one do you use transfer? There we go. Noom changed something again love when technology changes. And now I have more poll questions than I actually created poll questions for the webinar, but now I got to find more than one. Yes, it's Michelle and I forgot what I was talking about before I launched a poll. What was what were we? Oh, when you have multiple apps. And, knowing exactly like you were saying, what, where that is going to take place and if there is a shortfall in, in that integration like I'm, working with, you mentioned bookkeep there, right? And, understanding. That, that's going to only bring in journal entries, right? And how, is that, automation potentially limiting some of the workflows that you would be doing inside of QuickBooks, or is there a, like some of the sender or, some of the sales connectors, they're, mostly concerned with just getting the sale into QuickBooks, but then that passing the baton of taking it to the payout, picking up the fees and those types of things they're not too concerned with. So really understanding what, that integration will actually look like when you see it in, in, inside of QuickBooks so that you can take it to the goal line of I want to reconcile, right?

Matthew Fulton: 46:09

This made me also think about 0 sales receipts. But first, I actually would like to, there's a good question that was asking about talking about reconciliations for QuickBooks checking. And I have to be honest. I don't really use it. And the clients I have are not using it. So I'm not as familiar with that piece. I wish I could give answers to it. But Dan, Michelle, might you have some guidance on it?

Dan DeLong: 46:34

The way it started, right? The whole idea when it was QuickBooks Cash, right? And then it turned into QB checking. Accountants got the where the afterthought, of that problems and they're a little, bit of foreshadowing

Michelle Long: 46:57

there. Maybe,

Dan DeLong: 47:00

But like the accountants couldn't access the account at all, right? Like it was initially set up as a business owner or primary admin only could have access to that. And then through feedback thank you for submitting all the feedback, accountants can have access to it, but there's still things in that, that you can't access. But yes, you can get. The statements now and you can, view the statements from as, an accountant. I use it myself, it's my business. So I I'm, one in the same on both sides of that. I don't have clients or people that where I'm just the, the accounting professional in that position to know some of the subtle nuances with regards to that, but that history. Make sense as to what where you might be finding that finding the shortfall. But you should have access to the statements as an, accountant and be so that you can get them, but you gotta get to them through the, banking side. It's not in the. They don't necessarily show up as statements that are fetched, but you should be able to access them through your client quickly.

Matthew Fulton: 48:20

Stay tuned for our last poll and you're going to understand why based on a question like that. So I think we're pretty close on that one poll. Do you want to share the last piece? We're down towards the last little bit of the slides where we wanted to somewhat quickly talk about some. Other technology, I think this starts to become more of open conversation and then if there are other things we want to pull up QuickBooks online to show, we can do that. Of course, as well. So thank you guys for all the interaction today and the questions. Honestly, it makes it more fun for all of us when everybody's having a good time. Different tools and again, we could do a whole series on just something like this. LedgerSync and of tools for collecting and working with the data. Full disclosure, I like to always do that at the beginning. I've been working with, I've been using LedgerSync since 2015, 2016. I'm very proud to say I'm now a consultant, a paid consultant with them. I'm not here in that role today, but I've been working with them to help them build out their own global rules engine, which is designed to help us basically create rules that can live across all your clients at once instead of having to go in and out of every single company file and work in process transactions. Now what ledger sync really its core functionality for the longest time has been is fetching your transactions, your statements, and your images, checking deposit images. There were other apps like this in the past. Hubdoc, everybody was a big, fan of that, right? Hubdoc still exists, but they don't really do the fetching part. FileThis, is gone. Most every company that's out there. They've all gotten out of the game because it is so difficult through all these different financial institutions to stay connected. We even partner with MasterCard to connect with over 10, 000 institutions to grab statements, and I got some bad news for everybody. They're making it tougher and tougher to keep getting the statements. I will not be surprised if we see a dip in statement availability in QuickBooks online as well. We'll not be surprised. Is that

Dan DeLong: 50:24

a. Is that a financial institutions decision or is that more of a distant, security or both? Like it's trying to make it more difficult for. Bad actors to get into this information

Matthew Fulton: 50:42

So what it has to do with primarily is back in the day With all the statement fetching everything else That's because everybody was going in through the front door screen scraping and grabbing this information pulling it back to you As more institutions move over to an api an approved handshake behind the scenes That is providing the transactional data but they are still scraping the statements is what's been happening through all this. So Fiserv Finicity MasterCard Plaid, I know more about this stuff than any human ever should. Thanks to Maurice and LedgerSync and how it works back in the day. For example, you guys might remember Wells Fargo a long time ago for the bank feeds when they started putting in the pre approved authorization on XXDateXX. Do you know they did that just to stuff the bank memo so you'd have to go to the bank to download it and have It be useful. Thank you I won't hound on that. Yeah. Thank You know true authenticity wells fargo. Thank you. Okay So There's a lot of different tools out there that will actually help and grab some of this stuff dan, you've been testing out bot keeper and some of their bosses, right? so i'd love to let you talk about that because You Yeah.

Dan DeLong: 51:59

I talked to the folks at Botkeeper and really tried to understand what the heck Botkeeper actually is, and and they, invited me to be a beta tester for them and they are rolling out a function called auto bank rec, where they will actually. Fetch the statement if it's supported, right? That's all the, caveat if it's, if the statement is, supported, it also can be uploaded into their, portal, but what it will allow you to ultimately do is see that. The general ledger or their bank feed side by side with the, statement. And then you can just either confirm it, it'll either try to match it'll match the transaction or tell you, okay, there's some discrepancies with the statement. You can bring up the statement and see see for yourself, if, it's there the, really cooler part of it is that, If it doesn't support statement fetching or if it doesn't even support, connecting to to a bank feed and you have access to the statement, you can upload the statement and still use that auto bank rec option. It'll just look at what's in QBO at the time and allow you to compare, and. It's in beta. So let me preface that it's being a beta tested. So there are some beta things to it. And some of the challenges with, you mentioned paying down credit cards, like it can't see that type of transaction, but they're working on fixing that. So when you know, when it rolls out it might be a really cool ad to be able to do that. And BotKeeper does other things too in that portal. And that's not its only thing.

Matthew Fulton: 53:59

So you're basically saying sometimes these apps can neither confirm nor deny if they're getting it, right?

Dan DeLong: 54:05

exactly But it was cool. It was cool because I'm testing it out with Corpay is a MasterCard. They don't connect to QuickBooks online for bank feeds and their statement That they give you is oriented in two different orientations horizontal portrait and landscape. And and it's able to actually read that. It is? And, yes. Surprisingly, I didn't think you were going that way.

Matthew Fulton: 54:37

Okay. Yeah. That's impressive.

Dan DeLong: 54:39

Okay. I'm like here's a fun one for you. And I uploaded the statement and, lo and behold, it's got transactions from the statement side for me to match and it's got the information in it. That's actually, sideways if you actually looked at the PDF.

Matthew Fulton: 54:58

They need to turn that thing upside down or whatever they say. Relay, other online banking they of course give you the access to the images and statements as they, for their specific accounts. I could spend, I could have made a whole bunch of other tools on here as well. The ones I wanted to share right off the bat is Money Thumb. Hands down, the best I've ever used for their OCR technology, PDF OCR technology. And what I mean by that very specifically. You've got paper statements, you scan them in, and they're not a first edition digital line item, nice and clean. This will do a better job on statements than anything else I've seen. The only other thing that's probably close, but it's not really for statements, has been makers up. Their ocr large language model is pretty dang impressive so really like it They can convert to csv files or dot qbo files And there's a lot of tools inside of that of how you manipulate and use it. I've got videos on my youtube channel I'm sure There's a couple other ones hector's done as well proper soft I would recommend Buy their suite. This is one of those things. I think it's right now 200 bucks for their whole lifetime version of all of their different converters Just have it ready to go You never know if you're going to need to go to a csv to a qbo to an ofx to a blah blah blah Really great tool dext is another one that does the statement ocr parsing I believe they're still doing that inside of the program, right if anybody knows so those are three just quickies to to share as well And last one, which was 74 percent said yes for using transfers in another, I think

Dan DeLong: 56:50

I, I did share for a little bit.

Matthew Fulton: 56:55

All right.

Dan DeLong: 56:56

And this was, part of the challenge when, Matt and I were talking about, what are we going to talk about here is that there is definitely a rabbit hole. That we could go down as far as the nuances of the bank feeds, and it's been a while since Michelle and I had done ruling the rules in, in, in QuickBooks online, and really just talking about some of the technology behind the rules that you can and the bank feeds that when you take Advantage of that tool, it's either going to make create some efficiencies for you, or it's going to make your life a living hell. If you, do it improperly. And so we were thinking maybe this is a series that we have Matthew come on and do this sort of thing. And would you be interested in that? Yeah. Do we talk about, Talk about that. Do we do we go into some of these apps a little bit deeper? What, would be, what do you want, right?

Matthew Fulton: 58:04

I, yep. And as I'm going to, we're going to finish the poll there. I'll finish the last couple of slides. Cause I know I always like to try to keep us right on the time as best possible for everybody's, schedule the day. So back to you, Dan.

Dan DeLong: 58:20

Yeah. Always check us out at the QB power hour. com website. But there is something right there on the, homepage where you can put in, suggestions for things that you want us to talk about or unpack. Matthew, I really appreciate you joining us here today and all the hard work that you put into today's lesson. And hopefully there's some, if the chat is any indication there, there is some definite, nuggets, that, people took away from from today and Shel, always great to see you as well.

Michelle Long: 59:01

Yes. Thank you. Thank you. Good to see you, Dan. And thank you, Matt, for joining us. Thank you both for everything. I've got to run. Thanks everybody. See you soon.

Dan DeLong: 59:10

All right. Have a great day, everyone. We'll see you next time on the QB power.