Why do I have duplicated transactions in QuickBooks Online?
Duplicated expense transactions in QuickBooks Online is from not understanding:
- what transaction types are.
- how QBO treats transaction types in the background.
- how the transactions interact with the bank/credit card feeds.
They are also from not understanding how the transactions interact with the bank/credit card bank feeds. This lack of understanding can lead to entering transactions more than once.
What is the purpose of the different transaction types? Why are they important?
- Transaction types are a way of grouping similar transactions so that QuickBooks can treat them the same way every time.
- Transaction types determines how and where the transaction information gets recorded.
- Transaction types and how they are treated is the foundation for building reliable accurate reports that let the business owner know how their business is doing.
What are the expense and payable transaction types (cash outflow)?
The most used expense and payable transaction types are:
- bills
- expenses
- cheques
- bill payments
These are all cash outflow transaction types – cash goes out of the business.
Transaction Type: Bill
What are bill transactions in QuickBooks Online?
Bill transactions in QBO are vendor/supplier invoices/bills showing products or services that have been received but you are not paying for right away.
How does QuickBooks Online treat bill transactions?
QBO treats bill transactions by expensing/categorizing the transactions immediately in the Chart of Accounts and indicating that they have not been paid. These unpaid invoices/bills accumulate in the vendor/supplier accounts and show up in your accounts payable report as outstanding amounts you owe.
How do bill transactions interact with the QuickBooks Online bank/credit card feeds?
When you enter a bill transaction, there is no interaction with the bank feed. However, when you pay the bill using the pay bill feature aka: bill payment transaction type, you need to pay attention because the bank feed makes suggestions, and you need to choose the correct one. See the section below called Transaction Type: Bill Payment for how to work in the bank feed if you use the standard bill/bill payment method for entering expenses/invoices.
When would I USE bill transactions in QuickBooks Online?
You would use a bill transaction for a purchase of supplies or services when you do not pay for the items/services right away – ie: cannot afford to pay, will receive a monthly statement…etc.
When would I NOT use bill transactions in QuickBooks Online?
You would not use bill transactions for purchases of supplies or services when:
- you are entering a bill/invoice that you have paid for immediately with cash, debit, credit card, store credit card or digital currency.
- you are adding the amount through the bank/credit card feed using the “CATEGORIZE” or “ADD” buttons.
- you have already entered the transaction using an expense or cheque transaction type.
Transaction Type: Expense
What are expense transactions in QuickBooks Online?
Expense transactions in QBO are purchases of supplies or services that are paid for immediately using cash, debit, credit card, store credit card or digital currency.
How does QuickBooks Online treat expense transactions?
QBO treats expense transactions by placing the amount in the expense/category account in the Chart of Accounts and marking the transactions as having been paid. Expense transactions do not show up as amounts owing in accounts payable reports.
How do expense transactions interact with the QuickBooks Online bank/credit card feeds?
Here are two different scenarios of expense transactions interacting with the QuickBooks Online bank/credit card feeds:
- The expense transaction data entry scenario – when you enter the transactions using the transaction type expense you will have to either tie the transaction to a transaction in the bank feed using the “MATCH” feature or you will have to remove the transaction from the bank feed using the “EXCLUDE” feature. The “MATCH” or “EXCLUDE” system is outlined below in the Transaction Type: Pay Bills section.
- The bank feed scenario – when you enter expense transactions through the bank feed you review transactions by clicking into them while working in the bank feed. Then use the “CATEGORIZE” button to adjust the information and the “ADD” button to tell QBO that the transaction is how you want it and to put it into.
When would I USE expense transactions in QuickBooks Online?
You would use expense transactions in QBO for entering purchases or services that have been received and paid for with cash, debit, digital currency or charged to a credit card or store credit card.
When would I NOT use expense transactions in QuickBooks Online?
You would not use expense transactions in QBO for products or services that have been received but you will not pay for them right away.
*** If you enter an expense transaction and then enter a bill transaction for the exact same purchase, you will duplicate the transaction in QuickBooks Online.
Transaction Type: Cheque
What are cheque transactions in QuickBooks Online?
Cheque transactions in QuickBooks Online can only be done through bank accounts and are used to accomplish two things:
- to expense/categorize a transaction immediately, like to expense transactions.
- to pay outstanding invoices/bills out of your bank account to reduce amounts owed to suppliers/vendors, (used in the pay bills transaction type).
How does QuickBooks Online treat cheque transactions?
QuickBooks Online treats cheque transactions based on what you are trying to accomplish when using the cheque transaction option. All cheque transactions are related to bank accounts. Below are two ways to use cheque transactions and how QBO deals with each one:
- Cheque as an Expense – QBO treats the transaction the same way as expense transactions (outlined above in the Transaction Type: Expense section). The amount of the cheque transaction is shown as paid and the assigned expense/category is recorded in the Chart of Accounts.
- Cheque to Pay Bills – QBO treats the transaction the same way as pay bill transactions (outlined below in the Transaction Type: Pay Bills section). The cheque transaction will allow you to choose which invoices/bills the cheque is paying and will reduce the amount owing to that vendor/supplier by the amount of the cheque. (The expense/category was already chosen when the invoice/bill was entered so there is not duplication created.)
How do cheque transactions interact with the QuickBooks Online bank/credit card feeds?
Cheque transactions are treated and interact with the bank/credit card feeds the same way expense and pay bill transactions do. The only difference when using cheque transactions is that cheque transactions can only be used within a bank account. Other transactions can be used within bank accounts or credit card accounts.
- Cheque transactions used as an expense interact with the bank/credit card feeds the same way as expense transactions. (See above under the Transaction Type: Expense section.)
- Cheque transactions used as bill payments interact with the bank/credit card feeds the same way bill payment transactions. (See below under the Transaction Type: Pay Bills section.)
When would I USE cheque transactions?
- When you pay someone for products or services by writing a physical cheque, QBO treats this the same way as an expense transaction. In today’s times, this is usually done for smaller companies that do not take credit cards or when you do not want the payment to reduce your monthly e-transfer limit.
- When you want to pay down outstanding amounts owed to different vendors and indicate the invoices paid with that cheque.
When would I NOT to use cheque transactions?
- Do not use when you have already used the transaction type expense for the same transaction.
- Do not use if you have entered the transaction through the bank feed.
Transaction Type: Bill Payment
What are bill payment transactions?
Bill payment transactions are used to pay invoices/bills for products or services you have received but have not paid for. They work with the bill/bill payment method and are mostly used for true accounts payable where you have an agreement with a vendor/supplier and can purchase items on store credit. Usually, you will get a statement at the end of every month.
How does QuickBooks online treat bill payment transactions?
QBO treats bill payment transactions in the following ways:
- reduces the amount owed to the vendor/supplier by the amount of the payment.
- shows the chosen invoices/bills as having been paid.
- reduces the amount outstanding for the supplier/vendor in the accounts payable reports.
How do bill payment transactions interact with the QuickBooks online bank/credit card feed?
- When you physically pay a bill that has been entered into QBO using a bill transaction, the payment will be downloaded into the QBO bank feed next time the system syncs with your account online.
- When you use the pay bill transaction to record the physical payment and show that a bill has been paid, the bank feed will try to tie or “MATCH” the bill payment transaction that is in QBO with the actual payment downloaded from the bank and put into the bank feed
- QBO will indicate how many “RECORDS” are a possible match for that downloaded transaction and allow you to tie/”MATCH” the QBO transaction to the bank/credit card feed transaction. You will use “FIND MATCH” to choose the real transaction and tell QBO where to apply transaction then click “MATCH”.
- When you use pay bill transactions there are two correct choices in the bank feed that will not duplicate the transaction…”MATCH” or “EXCLUDE”.
When should I USE bill payment transactions?
- When you want to reduce the amount owed (payable) to a supplier/vendor where the products or services were entered using a bill transaction.
- Bill payment transactions pay down amounts owed to vendors and can be paid out of both the bank and credit card accounts.
When should I NOT use bill payment transactions?
Do not use bill payment transactions if you have paid the bills through the bank feed.
Summary
We have outlined and discussed the following:
- expense (cash outflow) transaction types – bills, expenses, cheques and bill payments.
- how QuickBooks treats each transaction type – expense & pay immediately, expense & pay later, and pay down vendor/supplier accounts payable.
- how the bank/credit card feed interacts with these transaction types and how you deal with them in the bank feed to keep everything working together.
Understanding these points gives you the information to determine which transaction type will work best in your situation.
HINT: Ask yourself the following question to help you determine which transaction type to use:
Did I pay for the item before I walked out of the store or had it shipped to me?
- Yes – use an expense or cheque transaction OR from the bank feed, click “CATEGORIZE” to adjust transaction and then “ADD”.
- No – use a bill transaction to enter the expense/category under the supplier/vendor name and then use a pay bills transaction to pay for the purchase(s) when you are ready. Then when you are in the bank feed and see the bill payment, use the “MATCH” button to tie the transactions together or “EXCLUDE” the transaction so you do not duplicate it.
As you can see, dealing with expense and cheque transactions is a one step process that gets more accurate and faster to enter when you are working in the bank feed. Bill transactions, on the other hand, are a multi-step process where you create a bill, pay the bill and then match the bill payment or exclude the bill payment in the bank feed.
Now that you know and understand transaction types, how QBO treats each transaction type, how the bank/credit card feed works in combination with QBO and how to work in the bank feed, play around in the software and find a way that works for you. As a side note, there are multiple ways to get anything done in QuickBooks Online.