In this first lesson within this new series focusing on additional transaction types we examine how QuickBooks Online handles Transfers and Recurring Transactions.
Transferring Funds
Use Transfers to move money between any accounts on your Balance Sheet. It’s a great way to move money between Checking and Savings, or pay off a Credit Card balance.
To properly Transfer money between Bank accounts or Credit Cards, select +New > Transfer.
The QBO Transfer window.
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Enter the accounts to transfer the money to and from, the amount of the transfer, and the date of the transfer. It is helpful to put a description of the transaction in the memo field.
Click Save and Close.
Note that Transfers don’t have any fields for Classes, Locations, or Customers. If you need those designations on your transfer, you’ll need to use a Journal Entry instead.
If this Transfer happens on a regular basis, then you can make it a Recurring Transaction. Click Make Recurring in the bottom center to set this up.
Another option is to set up a Bank Rule in the Banking Feed to make the transfer based on the account number in the bank description field. But be sure to just make one Rule for a transfer, not two.
PEBCAK! The best practice is to only make this Rule for the “Money In” side, filtered to just that specific account. That will automate it on the “to” side, and Match the Banking Feed on the “from” side. If you make two Rules for both the in AND out on the transfer, you’ll create two duplicated transactions.
Recurring Transactions
Saving Recurring Transactions is a feature in QBO Essentials and Plus, and I think it’s well worth the upgrade for this ability alone.
If you have a regular ongoing 1st-stage transaction like a Sales Receipt, Invoice, or Expense, choose Make Recurring in the black bar at the bottom of the window. This way, you don’t have to enter the transaction manually every month.
Note that you can’t use Recurring Transactions for Invoice Payments or Bill Payments, because they are 2nd-stage. QBO wouldn’t know what transactions to apply the payments against.
There are many options that you can set for a Recurring Transaction.
Recurring Transaction - in this case a 'Recurring Bill'
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Name the Recurring Transaction with a descriptive name so you’ll know what it is when you see it on the list.
For the Type,
- Scheduled transactions will be entered automatically, without any effort from you. These are perfect for transactions with the same dollar amount each time.
- Reminder will give you an alert when it’s time to process the transaction, so that you can adjust the date or dollar amount.
- Unscheduled just puts the transaction on a list, so you can call it up and use it as needed. This allows you to create Templates for various frequently-used transactions.
Interval can be Daily, Weekly, Monthly, or Yearly, on a specific day (“the 1st of the Month”), or a time period (“the 2nd Tuesday of the Month").
You can specify an End Date if it’s only for a certain period of time.
Hot Tip – Recurring Sales Receipts
My very favorite Recurring Transaction is a Sales Receipt combined with QuickBooks Payments Merchant Services.
I have clients on value billing. Instead of chasing them down for late payments, they fill in a credit card or ACH authorization form during onboarding. I create a monthly scheduled Sales Receipt that runs their payment automatically on the first of the month, and emails their receipt. My accounts receivable takes ZERO time a month. The money just shows up in my bank account!
Hot Tip – Transaction Templates
My other favorite use for Recurring Transactions is creating templates for complex Estimates or Journal Entries.
For example, one of my clients is a Construction Contractor. He created a series of Estimates for Bathroom Remodels, Kitchen Remodels, and ADUs. Whenever a potential customer asks for a bid, he has all the line items ready to go. He just fills in the Descriptions and adjusts the Quantities and Prices.
By saving them as Unscheduled, he can call on his templates as needed, saving hours of time.
Lesson Wrap-up
Transfers and Recurring Transactions are both essential QuickBooks Online features that streamline your daily workflow. Understanding the nuances of Transfers makes it easy to move money back and forth between assets, liabilities, and equity.
Recurring Transactions automatically add routine transactions to the register, and allow you to create templates for complex scenarios.
If you’re interested in learning more about QBO setup, visit the Royalwise OWLS (On-demand Web-based Learning System). I have a ‘Just for Bookkeepers and Accountants’ page with both free and paid video courses made just for you! You’ll not only learn helpful tips and tricks, but will get a front row seat to what’s going on in your industry. As an added bonus, use code IA10 for 10% any course you’d like.
Our next article will cover Journal Entries which is one of my favorite soapboxes, so if you are an Accountant or bookkeeper, make certain to tune in next week.