Setup Rules for QuickBooks Online Transactions

Setup rules for your QuickBooks Online Transactions

Utilizing QuickBooks Online

QuickBooks is a popular and widely used accounting software for small businesses. When utilized correctly, it can dramatically increase your knowledge of your company’s finances. One way to maximize your knowledge is to categorize your QuickBooks Online transactions daily. Downloading and sorting data from your bank and credit card transactions can help make tasks such as invoicing and creating reports easier when completed on a regular basis.

The Basics of Using Rules in QuickBooks Online

A QuickBooks tool is transaction rules. Utilizing rules can make the daily chore of categorizing transactions a breeze and will save you a tremendous amount of time overall in your bookkeeping duties.

Setting Up QuickBooks Online with Rules

The easiest way to set up rules with QuickBooks Online is to utilize your current transactions. To do this, open your transaction list. This can be done by using the navigation menu on the left side of the screen and clicking on banking.  Make sure the transaction is in the “For Review” section. This will show the transactions that are not sorted and can still have a rule applied to them. Once a transaction is sorted, it is more difficult to apply a rule.

The next step is to open an expanded view of each transaction by clicking on the item. You will see an option to create a rule. Next, you will need to give the new rule a name. Once you have named the rule, there are just a few more steps to easily apply the new rule to future transactions.

Completing Rules in QuickBooks Accounting Software for Small Businesses

The last step in setting up QuickBooks Online rules is to finalize the required designation fields. In the rules section, you will see a drop-down list where you will be able to determine the Transaction Type, Payee, Category and Class. Once you define these items, future transactions will have these options automatically applied.

Now you will instruct QuickBooks online how to process the transactions that meet your new rules. You can choose for QuickBooks to automatically process these transactions.  Those transactions will then come out of the “For Review” section and be categorized without you having to review the transactions.

The other option is to have QuickBooks automatically categorize the transactions but allow you to still review the items before they are finally processed. You would set this feature up by choosing the “Auto-characterize and Manually Review” option.

Example of How to Setup QuickBooks Online with Rules

Let’s say you own a plumbing company, and you purchase your supplies from the same set of vendors. You have multiple transactions each month from these vendors, and you don’t want to manually sort and process all these transactions as long as they are under $300. Any transaction above $300 dollars would require a manual review and designation.

The first step is to name the new rule and tell QuickBooks if this transaction is Money in or Money out. Next, choose to either apply this rule to all bank accounts, if you have more than one, or pick the specific accounts this rule applies to. Then, tell QuickBooks the criteria for the conditions want for the item. In other words, does your transaction meet all conditions set forth to apply to the rule, or can it meet one or more of the conditions and still apply to the rule?

Finally, you will identify the actual conditions. For this example, let’s say the following conditions must be met for the rule to apply:

  • The transaction description is exactly ABC Plumbing Supply Company, Inc.
  • The amount is less than $300.

Now that you have set up rules, any transaction that fits the criteria will follow the rules, and there will be no need to manually review and categorize these items. Applying rules to all common transactions can result in saving you time and money each month.

Easier Than You Think

While this may sound complicated, choosing how to setup QuickBooks Online transaction rules will make bookkeeping easier in the future. Taking the time to learn how to apply rules to your company’s transactions may require a substantial initial investment of time. However, the reward outweighs any amount of time spent in learning.


Helpful Tip

Until you are completely comfortable with the rule, it is still recommended to review the categorization each month to make sure your rules are correct. Once they are working as they should, you will be less likely to miss a transaction or incorrectly categorize items in the future.

Barklee Institute is happy to help you set up your QuickBooks Online account so that you can be confident you are starting your record keeping on the right foot. Visit QBO Services – The Barklee Institute for more information on this service.

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