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Managing common accounting workflows in QuickBooks Online

We know that keeping your books accurate requires managing specific workflows correctly, from handling customer payments to correcting bank errors. This guide covers several common tasks and how to handle them in QuickBooks Online (QBO).

Moving payroll or direct deposit transactions to the correct bank account

If payroll taxes or direct deposit transactions were posted to the wrong bank register, you generally cannot edit or delete them after they have been processed. To correct this, you need to move the funds using a journal entry.

1. Select the + New button and choose Journal Entry.
2. Enter the Date the transaction originally took place.
3. Enter an Entry number if you wish to track this specific correction (optional).
4. In the first line, select the incorrect bank account (the one where the money was mistakenly posted). Enter the amount in the Credit column to remove the funds.
5. In the second line, select the correct bank account. Enter the amount in the Debit column to add the funds to the right place.
6. If applicable, use the Name field to associate the entry with the specific employee or vendor.
7. Select Save and close.

Handling customer payments and Undeposited Funds

By default, QuickBooks Online groups customer payments in the Undeposited Funds account. This holds the money until you are ready to deposit it at the bank, mimicking your real-world banking process (like a night drop).

To move funds from Undeposited Funds to your actual bank account:

1. Select the + New button.
2. Choose Bank Deposit.
3. Select the payments you want to combine from the Select the payments included in this deposit section.
4. Verify the Deposit to account is correct.
5. Select Save and close.

If you prefer payments to bypass Undeposited Funds and go directly to a bank account, you can change your payment settings. Note that this prevents you from grouping multiple payments into a single deposit record.

1. Select the Settings gear icon.
2. Choose Account and settings (or Company Settings).
3. Select the Sales tab.
4. In the Products and services or Payments section, find the preference for deposit handling (this may vary depending on your specific version settings) and uncheck the option to use Undeposited Funds.
5. Select Save and then Done.

Matching downloaded bank transactions to bills

If you download bank feeds, you may see bill payments that need to be linked to open bills. In QuickBooks Online, this is done through the “Match” or “Add” process in the Banking center.

1. Go to the Transactions or Banking menu.
2. Select the Banking tab.
3. Locate the downloaded payment transaction in the list.
4. If QuickBooks finds a matching bill, it will often suggest a Match in the action column. Select Match.
5. If no match is found, select the transaction to review it. Choose Find match to locate the specific bill the payment applies to, then select Save.

Managing payroll tax forms (TD1)

When setting up employee payroll deductions, accuracy is key for compliance. If an employee claims only the basic personal amount on their Federal TD1, you must still account for the Provincial basic personal amount.

• Both the Federal and Provincial TD1 forms are required in the employee record.
• Do not enter “zero” for the Provincial claim if the employee is entitled to the basic personal amount. Enter the appropriate basic personal amount for that province.
• You can verify these amounts by viewing the specific employee’s payroll setup details.

Tracking inventory for cut-to-length products

QuickBooks Online Plus and Advanced support inventory tracking, but complex manufacturing or “cut-to-length” workflows (such as buying a coil of material and cutting it into custom lengths) can be challenging to track automatically.

• Standard inventory tracking works best when you buy and sell whole units.
• For cut-to-length scenarios, you may need to create a workaround, such as tracking the bulk material as one inventory item and the cut lengths as non-inventory or service items, or adjusting inventory manually after cuts are made.
• We recommend consulting Intuit’s official documentation or an accounting professional to ensure your specific workflow does not cause data discrepancies.