Connect your Bank Account to See your Expenses in Quickbooks

In today's video, we are going to walk through setting up your bank accounts in QuickBooks, which is step one. Now, it doesn't exactly have to be step one, but in this series that's going to be our first step as we walk through everything you need to know about setting up your bank account in QuickBooks, making sure chargers are coming through appropriately, and how to view that information on your financial statements. So let's go ahead and dive right in. All right, so step one, we're going to get your bank account connected for the very first time. So I am logged into a test QuickBooks account. I have not touched this whatsoever. I've done pretty much nothing to this. So we are diving in for the first time as it comes right out of the box. Now, In a Real QuickBooks account, your yours is going to look blank, right? It's not going to look like mine. But first thing you're going to do is go to this linked account section. So I'm going to click on this and I'm going to type in the bank. So let's say we're using BMO Harris Bank. First of all, I don't know why on earth you would ever use B. Mohares bank, because they are absolutely terrible. But let's just pretend we are using them. And you put in your username and password, you would go ahead and get connected to that bank account. And what will happen is once you get connected and authenticated, it's going to ask you what you want to pull in for your history. And a lot of times it'll tell you, hey, do you want to pull in all the history that's associated with this account, or do you want to pick the last 60 days, 90 days, things like that? So go ahead and make that decision appropriately. And then once you go ahead and connect your account, it's going to populate just like this and then there's going to be transactions that are going to be pulling through as you get your bank account connected. So you can see in this example, we have a checking account here that's been connected. If you want to edit that information, you can go ahead and edit the sign in information. If for some reason you change your password and you need to update that later, or you could also edit the account information within itself. So as far as the mapping to QuickBooks, we want to make sure that this is mapped as a bank and we want to make sure we have the right account type mapped in case in this instance we have a checking account. And if you just have one checking account, you can name it checking account or if you want it, something specific, you can also put in. One thing that I like to do is put in the last four digits of the checking account number. So that helps me in the event that I have multiple bank accounts that I can refer back to that later on. And, and if you wanted to map this under a sub account, we can get into that later. But essentially, if you wanted to have multiple accounts, you could go down this route. For now, we're just going to leave that unchecked. I'm going to hit save and close and you can see it renamed as checking 4197. All right, so now let's look at the bank Balance and the QuickBook balance. Now why are these two disconnected? Well, in this instance, if we think about what's going on in our bank account, we have two things. We have revenue or we have money coming in that makes our bank account balance go up and then we have money coming out which makes our bank account balance go down. So those are the two things that we need to look for. And the reason why we are seeing a disconnect here is because QuickBooks is saying in our ledger here for the checking account that the balance is 1201, but the bank balance is showing as negative. Right. So we obviously have disconnect between the bank balance here, it's being reported and what's in QuickBooks. So as we start clearing through all of these transactions later on, that balance is going to be connected into one to one fashion. I wouldn't be too alarmed with this on a day to day basis now there's going to be times where your quickbook balance is different from the checking account bank balance. And that literally could just be timing. You know, expenses have been posted in here and they haven't quite showed up. You know, that's pretty common if you're running QuickBooks payment processing, for example, where deposits are showed as paid and received, but the actual cash has not been posted into your bank balance. So now where can you see this? We're going to go to our report section and we are going to click on the balance sheet. And you're going to see right here, you know, you're going to see right here on your balance sheet. Remember when we renamed this checking 4197. You can see that right here. So we can see that QuickBooks is saying that our balance is 1201. And if we look back to our bank transactions here, we can see that is the balance that it is showing. We can also click on go to bank register and, and that will give us some insight into why this is showing as 1200 and we can work our way back all the way to the beginning. So if I click on this and filter, you can see what balance that we started at as the opening balance and you can see all the debits and credits of what's happening with this transaction. That works us all the way down to the 1201. So if we're trying to gain an understanding of what happened here, why, why is the balance showing 1201? This is the ledger that is essentially showing you everything that is going on in a transaction. So if you wanted to get, let's say, a credit card connected to your QuickBooks or any other bank account connected to your QuickBooks, we're going to follow the exact same steps. So if you look at our screen here, we have this MasterCard connected to our QuickBooks account and our savings account connected to our QuickBooks account as well. So these are three different accounts that are showing up here. So if we go and look at our balance sheet and we go to this report here, we can see that we have the checking account and the savings account. Okay, well, where's our MasterCard? So in another video, we'll dive into what the balance sheet is and what is presented on the balance sheet. But just for the purpose of today, you will be able to see the MasterCard under the credit card section. So as long as that is mapped correctly, that is where the MasterCard will be. So if we go back to here, we can see the MasterCard's here, savings is here, checking account is here. And we go back, all three counts are here and as transactions get posted to those accounts. So every time I use my credit card, those transactions are going to show up here and you typically have to go in and update them. They're not going to just pull automatically a lot of times. So you can just go and hit that update button and you can see how quickly that updated it updated all three accounts. So usually it takes a few seconds, but all three will get updated and any new, new transactions that have not been posted will show up here. So I typically would like to keep this as clean as possible and most up to date as possible. So this here, you can think of this as like a to do list of all the transactions that you need to post to your financial statements. Now, depending on how you categorize all these statements, that is going to determine whether this gets landed on your profit and loss statement or your Balance Sheet Statement the last thing we're going to talk about in today's video surrounding bank accounts in general is going to be how to reconcile them. This is something that you should be doing at the end of every month. I'm just going to quickly show you this in another video later down the road. We will fully walk through this process, start to finish. But just so you know, you can find this in the Reconcile section, your menu may or may not look a little different. So we're going to go ahead and get started here. And you can see at the end of every month you should be reconciling all your accounts. So if you have two accounts, you should be reconciling those two accounts every month. Or if you have three accounts, again, even the credit card, you should be reconciling that. So if you Type in the MasterCard, we need to be reconciling that because that is going to be our ultimate check and balances to make sure that we have everything recorded appropriately in our financial statements and that let's say we have a balance of $10,000 at the end of the month. We want to make sure that our QuickBooks accounts also show a balance of $10,000 at the end of every month. One last bonus tip I'll give for you is sometimes banking institutions have security parameters set up on their bank accounts that don't allow external third party such as QuickBooks to get connected without you authorizing that permission within the bank account. So if you are having trouble getting your bank account connected and maybe the error in QuickBooks says reach out to your banking institution. That might be something that you check out in your online banking with your local bank and go into your profile, see if there's any security settings that allow third party integrations or third party authorizations and if so, that's a very simple fix. If not, unfortunately you'll have to call your bank, get them involved in their customer service department and help them get your bank account connected. But it's been a few years since I've ran into that problem myself, so I think a lot of banks have made it pretty accessible for people to get connected to QuickBooks now because it is the number one small business accounting solution out there. So hopefully that is not a problem you run into. But if you do have any problems, feel free to reach out. Always happy to help answer any questions. See you next time. So go ahead and like and subscribe below. I promise you you're going to want to stay tuned for this full accounting series that we're going to put on for you. At the end of it, you're going to know exactly how to record income and expenses. And you're probably going to be better than your average bookkeeper by time. We're done. See you next time.