QUICKBOOKS ONLINE ADVANCED CERTIFICATION COURSE

Supplemental Guide
Module 4: Reporting & Troubleshooting
Copyright

Copyright 2016 Intuit, Inc. Intuit, Inc.

All rights reserved. 5601 Headquarters Drive
Plano, TX 75024

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©2016 Intuit, Inc. All rights reserved. Intuit, the Intuit logo, Intuit ProLine, Lacerte, ProAdvisor,
ProSeries and QuickBooks, among others, are trademarks or registered trademarks of Intuit, Inc. in
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owners.

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The publications distributed by Intuit, Inc. are intended to assist accounting professionals in their
practices by providing current and accurate information. However, no assurance is given that the
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situation. Accordingly, the information provided should not be relied upon as a substitute for
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nor does it have any responsibility for updating or revising any information presented herein. Intuit,
Inc. cannot warrant that the material contained herein will continue to be accurate nor that it is
completely free of errors when published. Readers should verify statements before relying on them.
Supplemental Guide Table of Contents

Table of Contents

About the Author .................................................................................................................................... 2

Supplemental Guide Overview ................................................................................................................ 3

Purpose of this Guide ................................................................................................................................ 3

Google Chrome ......................................................................................................................................... 3

Learning Objectives ................................................................................................................................... 3

Training at a Glance ................................................................................................................................... 4

QuickBooks Online Accountant Test Drive ................................................................................................. 4

Topic 1: Advanced Reporting .................................................................................................................. 5

Customize Reports .................................................................................................................................... 5

Understand Report Logic ......................................................................................................................... 19

Custom Business Reports ....................................................................................................................... 31

Topic 2: Complex Problem Solving........................................................................................................ 39

Data Review and Cleanup ........................................................................................................................ 39

Banking and Reconciliation Troubleshooting ............................................................................................ 52

Guide Conclusion ................................................................................................................................. 73

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Supplemental Guide About the Author

About the Author

Laura Redmond

QBO Pro | Redmond Accounting Inc.

Aero Workflow

Laura Redmond is a QuickBooks Online user since 2005, Advanced Certified QuickBooks ProAdvisor, member of
the Intuit Trainer / Writer Network, and co-author of the QuickBooks Online training and certification courses for
ProAdvisors.

Laura runs QBO Pro | Redmond Accounting Inc., an outsourced client accounting and consulting firm. Selected as a
Top 20 Firm of the Future by Intuit, their focus is on cloud accounting; all clients are on QuickBooks Online plus
various integrated apps in the QBO ecosystem. Laura co-created AERO Workflow app used by accounting firms to
manage their service delivery with staff performing recurring tasks for multiple clients. The Aero Library includes step-
by-step instructions and procedures for many of today’s most popular apps in the QBO ecosystem.

A special thank you to the team of accounting professionals and product specialists that reviewed the material in
these five courses and enriched this content with their knowledge and experience: Stacy Kildal, Woody Adams, M.B.
Raimondi, Victoria Cameron, Heather Satterley, Cathy Iconis, Kaydee Peterson and Michelle Long.

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Supplemental Guide Overview

Supplemental Guide Overview

PURPOSE OF THIS GUIDE

In this module we cover advanced reporting and troubleshooting concepts for complex problem solving. An essential
function of an Advanced Certified ProAdvisor is the ability to evaluate the accuracy and integrity of your clients’
QuickBooks Online company data, diagnose problems and prescribe solutions. Accurate financial data provides
dependable business intelligence and promotes the well-being and profitability of a business. The purpose of this
guide is to help you understand how to utilize advanced reporting and troubleshooting capabilities in QuickBooks
Online.

PRODUCT UPDATE NOTIFICATION! QuickBooks Online and QuickBooks Online Accountant are
constantly being improved:

When you log in to qbo.intuit.com, it may look different from the screenshots originally taken for this
supplemental guide
Where to go to learn about the latest product updates:

-https://www.firmofthefuture.com/product-industry-news/product-updates

-http://quickbooks.intuit.com/blog

GOOGLE CHROME

NOTE: Screenshots and instructions included in this guide use Google Chrome as the browser.

LEARNING OBJECTIVES
Recognize the available options to customize reports

Identify the fundamental logic behind QuickBooks Online reports

Indicate customized reports that are used in various business scenarios

Identify the steps to analyze the health of a QuickBooks Online company

Indicate the recommended troubleshooting solutions for banking and reconciliation

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Supplemental Guide Overview

TRAINING AT A GLANCE
Use this as a guide to selecting specific workflows you want to cover.

Topic Step by Step Workflows Learning Objective

Recognize the available options to

customize reports
Customize reports
1. Advanced Identify the fundamental logic behind
Understand report logic
Reporting QuickBooks Online reports
Business reports
Indicate custom reports that are used in
various business scenarios

Identify the steps to analyze the health of a

Data review and cleanup
2.Complex Problem QuickBooks Online company
Banking and reconciliation
Solving Indicate the recommended troubleshooting
troubleshooting
solutions for banking and reconciliation

QUICKBOOKS ONLINE ACCOUNTANT TEST DRIVE

Exercises contained inside this Guide can be completed using a QuickBooks Online Accountant “test drive” file. The
test drive uses a sample company file called Craig’s Design & Landscaping Services. It can be accessed through the
following link:

Craig's Design & Landscaping

You don’t have to create an account or sign in to access the test drive file; just complete the security validation and
click Continue.

This test drive is designed for you to explore and try out new things without worrying that you will break something or
make a mistake. It is not designed to retain any changes you make. Once you close this QuickBooks Online test
drive company it is completely refreshed, so please remember to allow sufficient time to complete each workflow.
Don’t worry if you have to close the test drive before you are finished, you can always begin again

NOTE: The link to the test drive company uses QuickBooks Online Accountant. It contains some features that
are not available in QuickBooks Online Simple Start, Essentials or Plus. (You may wish to share the
QuickBooks Online test drive file with your clients for them to practice without seeing Accountant-only
features: https://qbo.intuit.com/redir/testdrive.) In addition, some features (such as in-product Help) are not
enabled inside this test drive file. This is subject to change.

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Supplemental Guide Advanced Reporting

Topic 1: Advanced Reporting

The work performed to set up the accounting structure, record financial activity and reconcile accounts transforms
raw transactional data into meaningful and useful information the business needs to make effective decisions.
Reports are one important and frequently used tool for analyzing data. There are lots of different reports for different
purposes. Businesses need this information to both run the business and identify potential problems. Let’s explore:

How to customize reports

Understanding reporting logic

Business-related customized reports

Instructions and screenshots referred to in this module are of QuickBooks Online’s classic reporting screens, since
this is the default report interface for the majority of QuickBooks Online users and the QuickBooks Online sample
company at the time of this publication. Some QuickBooks Online users have turned on the newer reporting interface
called Redesigned Reports (from the gear icon select QB Labs). Redesigned reports have the same basic reporting
logic as classic reports, but different organization of reporting controls.

CUSTOMIZE REPORTS
As advanced certified ProAdvisors, we need to know how to use the customization tools to create custom reports
that reveal pertinent data and trends to deliver the information our clients need to run their companies, help solve
problems and answer business questions. The customization options available for each report depend on the type of
report you run.

Here are the customization options. Keep in mind you may not see them available on every report; rather, you will see
them only on the types of reports to which they apply.

General

Aging

Rows/Columns

Dates

Lists/Filter

Status

Match

Numbers

Header/Footer

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General Customization Options

The General section of the customization screen lets you specify the transaction dates to include in the report. You
can specify whether the report should be generated on the cash basis, representing transactions paid, or the accrual
basis, representing transactions incurred. There is also a setting to specify whether to show sub-categories on
summary reports.

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Aging Customization Options

There are two options for aging methods, depending on whether the invoice is currently due or was due on the report
date. Let’s say your report is dated for the last day of last month.

If you select Current aging method – If the invoice was open at the end of last month but has since been paid,
this report will not show the invoice since it is not currently due. But if the invoice was open at the end of last
month and it is still open, it would show on this report.

If you select Report Date aging method – If the invoice was due on that date, regardless of whether or not it has
been paid in the meantime, it will show on this report

This section also allows you to set the number of days in the aging period and the number of aging periods to show
on the report.

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Customization Options for Rows/Columns

The customization options for Rows/Columns vary based on whether you run a detail or summary report. It is
important to know what features are available in different report types so you can choose the proper base report
when you create custom reports.

Options for Detail Reports

You can select a category by which to group transactions, such as account, customer or product/service item. This
option is available only on detail reports. When you select a grouping, the Amount column will sub-total for each
group. For example, if you group by Customer, the report will sub-total by Customer. You can customize the
columns of data to display on the detail report by clicking on the Change Columns button. The next screen will show
you the available columns and selected columns so you can add/delete which columns to show on the report and
change the column order. The Sort By option allows you to sort the data in a number of ways; the Sort In option
allows you to specify whether that field should be sorted in ascending or descending order. For example, on a P&L
you could drill into the Professional Services expense account and customize it to group (sub-total) transaction lines
by vendor and sort by number. That would allow you to see how much is attributed to each vendor sorted by the
reference number.

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Options for Summary Reports

Customize the report to show columns by a specified category, such as Total or Month or Class. Show sub columns
for comparison, such as year-to-date amounts for each row. Also specify whether to show rows or columns of active
data, all data or non-zero data. For example, on a P&L you could customize it to show columns by Location with %
of Income sub-columns.

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Customization Options for Dates

When you set a custom date range, the report will only show data matching those dates. Depending on the type of
report, you can filter by:

Created date

Last modified date

Time activity date

Due date

Service date

For example, you can run a Transaction Detail by Account report for all transactions last modified today.

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Supplemental Guide Advanced Reporting

Customization Options for Lists

The Lists section lets you filter out some information and show only the specific information you select on your
custom report. On each of these you can select a particular name from the list or select multiple names. Some of
these lists give you special options. You can filter by:

Transaction type (including posting and non-posting)

Account (source account)

Distribution account (target account)

Name

Customer

Vendor

Employee

Product/Service

Location

Class

Payment method

Terms

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If you save one of these customized reports, be careful with these filters when you select multiple names – any new
names added to QuickBooks Online won’t be on this report.

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Status Customization Option

The Status section is another way to filter information to show only specific data on your report. Filter by:

Cleared

AR paid

AP paid

Check printed

Billable

Estimate status

Customer taxable

Product/Service taxable

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Supplemental Guide Advanced Reporting

Depending on the report you start with, you will see different status options to filter by. For example, you can run an
estimate list by customer and customize it to show only an estimate status of pending. If you run a balance sheet and
drill into a bank account to view the Transaction Detail report, you can customize this to show only uncleared
transactions.

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Match Customization Option

The Match section lets you specify the exact criteria you want the report to include. There are no drop-down fields
from which to select. In these customization fields, you must enter the exact text you want to match:

Amount

Memo

Reference number

Custom fields (if turned on in settings)

Ship via (if turned on in settings)

For example, if you have a custom field for Sales Rep, you can create a detail report of all transactions that match a
sales rep.

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Supplemental Guide Advanced Reporting

Numbers Customization Option

The Numbers customization options pertain to number formatting on your reports.

Customize how you want to show negative numbers – beginning with a minus, in parentheses, trailing minus, in
bright red

And how to show all numbers – with no customization, divided by a thousand, or without cents

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Supplemental Guide Advanced Reporting

Header/Footer Customization Option

This section lets you customize:

Company name

Report title

Transaction date

Date prepared

Time prepared

Report basis

Set header and footer alignment

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Supplemental Guide Advanced Reporting

Share Customized Reports between QuickBooks Online Companies

Reports can be shared between QuickBooks Online companies using the URL generated by the report. This works
well for general customizations, like a customized Product/Service list showing the income and cost account
columns. However, if the report is customized to filter for data specific to one QuickBooks Online company (such as
account names, customer names, etc.), there’s a good chance the report won’t translate properly in another
QuickBooks Online company. In addition, the QuickBooks Online company with which you are sharing a report must
also have access to the base of that report. If you have customized a report that is only available in QuickBooks
Online Plus, then sharing it with an Essentials or Simple Start company will fail.

Step-by-Step: Share a Report Template

1. Open the report from within the client company in which it resides.

2. Copy the web address (URL) from your web browser or add a bookmark to your bookmark bar.

3. Exit the QuickBooks Online company.

4. Log into the company with which you wish to share the report.

5. Paste the copied address into the address bar of the browser or click your bookmark.

NOTE: This will display the report but with the current company's information.

At the time this training was produced, reports-only users in QuickBooks Online were still using QuickBooks Online
classic edition; this reporting functionality is not available in that earlier version of QuickBooks Online.

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Supplemental Guide Advanced Reporting

UNDERSTAND REPORT LOGIC

One of the benefits of QuickBooks Online is the easy access to financial information about the business. The more
you understand how QuickBooks Online reports work, the better equipped you will be to get the most out of them.
Here we will learn about report size limits, report types, cash-basis reports and expenses vs. purchase reports.

Report Size Limits

Reports are made up of cells. A cell is the intersection of a single row and single column. Only cells that have data in
them count toward the limit. You may see a message stating Report too large to display at the bottom of the report if
the report exceeds the limits.

QuickBooks Online has certain size limits when displaying reports:

Maximum 1024 columns displayed

Maximum 120,000 cells with data

Maximum 6 MB worth of data

In addition to all the reports provided in QuickBooks Online and the myriad customizations you can use to build a
report, you can further customize reports by exporting them to Microsoft Excel®. Businesses may export to Excel for
purposes of providing a subset of data to auditors, to use with pivot tables or lookups to customize the information
further or to keep as a data backup.

If you run a QuickBooks Online report which exceeds the limits, you could run sub-sets of the data and export each
to Excel. Once in Excel, you could manually add them together into one spreadsheet (copy and insert rows from one
spreadsheet to another), as the limits in Excel are greater than QuickBooks Online’s reports:

Maximum 1024 columns displayed

Maximum 400,000 cells with data

Maximum 10 MB worth of data

If your reports are being cut off and you believe it is due to QuickBooks Online report limits, here are some
workarounds:

If you are looking at a report in QuickBooks Online, save the report to Excel to increase the limits

Since the limit is based on the raw amount of data displayed, you can potentially get more useful data into a
report by eliminating unneeded columns

Segment the report by generating reports with intermediate date ranges, such as day, week, month

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Supplemental Guide Advanced Reporting

Report Types

There are different types of reports in QuickBooks Online, such as summary, transaction detail, aging and list reports.
Summary reports, such as Profit & Loss, do not show transaction detail. List reports, such as the Account list, do not
calculate a total sum or running balance. The type of report you run determines the customization options available.

A P&L is a summary report. It shows the total amounts for each account. The customization options available are
appropriate for this type of report. For example, you can change the columns shown from Total Only to Years.

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Supplemental Guide Advanced Reporting

If you drill into an income account on the P&L, you will find a detailed transaction report of the individual financial
activity associated to the summary amount you clicked in the P&L. Click the Customize button and you will have
customization options appropriate for a Transaction Detail type report. For example, you can change the Group By
setting from Account to Product/Service.

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Supplemental Guide Advanced Reporting

But if you go back to the P&L and drill down into the net income line then click Customize, the customization options
available are for a Profit & Loss Detail report type. This report is hard-coded to group and subtotal by P&L account
and does not offer an option to group by another field, as the previous Transaction report type did.

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Supplemental Guide Advanced Reporting

List reports, such as the Account List report, have no column totals. They have customization options appropriate for
lists but none for general, aging or grouping/sub-totals. Some list reports do allow grouping, such as the Customer
Contact list which can be grouped by shipping Zip code, for example.

Some report types like the Audit Log, Company Snapshot and Scorecard have their own options for customization.

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Supplemental Guide Advanced Reporting

Cash Basis Reports

A great feature of QuickBooks Online is its ability to calculate both cash-basis and accrual-basis reports. On a cash-
basis balance sheet, the accounts receivable and accounts payable balances should be zero, no accruals. On a
cash-basis Profit & Loss statement, only income received and expenses paid appear. If a bill is entered but not yet
paid for the purchase of a new company vehicle, the cash-basis balance sheet will not account for it in the asset
account or the AP account. Some things to note about cash reporting are:

When a cash-basis report is generated, QuickBooks Online disregards open accrual transactions such as unpaid
customer invoices and unpaid vendor bills

When the targets (distribution accounts) are P&L accounts, these amounts are not calculated when a cash-basis
P&L is generated

When the targets (distribution accounts) are Balance Sheet accounts, such as the purchase of assets or paying
down a loan, these amounts are not calculated when a cash-basis balance sheet is generated

Unapplied Cash

When you record a customer payment via the Receive Payment screen and do not apply it to an invoice, the cash-
basis P&L will report it as Unapplied Cash Payment Income.

Likewise, a bill payment that is debited to the AP account but is not associated to a bill, has to report the cash
expenditure somewhere on cash-basis reports; it can’t show it as AP so QuickBooks Online reports it on a cash-
basis P&L as Unapplied Cash Bill Payment Expense.

The Unapplied Cash accounts are similar to Retained Earnings accounts in that QuickBooks Online calculates the
amount automatically for you when you run the report. These transactions are not actually posted to the GL
accounts, they are merely calculated and displayed as balances in these Unapplied Cash accounts for purposes of
the cash-basis report you run. If you drill down into the cash-basis P&L to the Unapplied Cash account and into the
transaction journal, you will see the transaction is not posted to that account; it only shows there when you generate
that report.

Similarly, if a bill payment is dated earlier than the bill it is applied to and the cash-basis P&L is dated sometime
between the bill payment and the bill date, the bill payment is shown as Unapplied Cash Bill Payment Expense. The
same is true for customer payments received earlier than the invoice date: the payment is shown as Unapplied Cash
Payment Income when the report is generated for a date prior to the invoice date. In addition, the inventory
adjustment to COGS is not recorded on this report because it is recorded by the invoice and the report is dated
earlier than the invoice.

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Supplemental Guide Advanced Reporting

Credit Cards

When a business records credit card activity to a liability account, this activity is treated as a cash transaction. This
activity is not reversed if the liability has not been paid yet. The cash-basis balance sheet will show a balance for this
liability account; it will not reverse the activity the way it does the AP account.

If your client enters an AP bill against the liability account to record the payment of the credit card balance and the bill
is not yet paid when the cash-basis balance sheet is run, the AP bill will be reversed. However, the bill will not be
reversed to the liability account where it is coded. Instead, the amount of the bill will show on the P&L as Unapplied
Cash Bill Payment Expense. An adjustment should be considered for tax purposes.

Accounts Receivable/Accounts Payable

Should you find an AR or AP balance on a cash-basis balance sheet, you can customize a report to investigate. Click
on the AR or AP balance  Customize. In the Rows/Columns section. From the Group by drop-down list, select the
Customer or Vendor. Click Run Report. This will show the balance of every customer or vendor that is creating the
total in AR or AP, which can then be analyzed to determine the reason for the balance.

Review Expenses and Purchases

QuickBooks Online has a group of reports called All Reports  Review Expenses and Purchases. Expense reports
are based on accounts and purchase reports are based on items.

The Purchases by Vendor Detail report sums transactions by vendor associated with product/service items and
does not include transactions posted directly to GL accounts. This report includes transactions posted to both
Balance Sheet accounts, like Inventory Asset, and P&L accounts, like Cost of Goods Sold.

The Expenses by Vendor Summary report sums vendor activity posted only to P&L accounts regardless of
whether a product/service item was used

The Transaction List by Vendor report is a list of all transactions related to vendors, whether posted via account
or item, and includes bills, bill payments and non-posting transactions like purchase orders

Comparing these reports to each other will not necessarily give you the same totals, as they can each be made up of
different transactions, so use the appropriate one for your purpose.

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If none of these expense and purchase reports in QuickBooks Online fit the circumstance, customize a Transaction
Detail by Account report found in the Accountant Reports tab in the Report Center. Here are some suggestions for
building a report to show posting activity (whether by account or product/service item) sub-totaled by vendor:

Group by Vendor

Change columns to add Account and Product/Service, and remove Name

Filter lists for

− Transaction Type: Posting

− Distribution Account: Select Multiple

a. On the Select from List on the left, select all accounts (click the top account, hold your Shift key, scroll to
bottom of list and click the bottom account)

b. Click the Add button

c. From the Account Filter list on the right, remove payment accounts — bank, AP, credit cards

− Vendor: Specified

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Warning: Beware of negative amounts representing credits or expenditures posted to liability, equity and
income accounts. Because this report has been highly customized with individual accounts selected, use
caution in saving it and using it in the future, as it will not include any newly added GL accounts.

The Audit Log

The QuickBooks Online Audit Log contains a list of all the changes made to the company data. For this reason and
for security purposes the Audit Log cannot be disabled. Lines displaying changes to transactions within the log
cannot be deleted. Dates and times in the Audit Log reflect when events occurred and are displayed in your local
time. On the QuickBooks servers, the events are recorded in Greenwich Mean Time. When the times are displayed to
you in the Audit Log and Audit History, software on your computer interprets the GMT and changes it to reflect your
time zone.

There are two reports in QuickBooks Online which are pre-filtered versions of the Audit Log: the Exceptions to
Closing Date report and the Voided/Deleted Transactions report.

Open the Audit Log from the gear icon or click Reports  All Reports  Business Overview  Audit Log.

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There are several ways to view the Audit Log.

To limit the view to specific users, dates or types of events, click Filter and set the options available

To control which columns are shown and printed, click the gear icon

To open a transaction noted in the Event column, click its link (deleted transactions have no link and cannot be
reinstated; they must be added again to restore them)

To see a history of the event, click View in the History column to see exactly what changes were made
throughout the history of a transaction

− Click the expand arrow at the left of the event line you want to examine

Data that was changed is shown in highlight

− Click the Show All button in the upper right to expand all arrows

− Click the Compare button to see just what was changed

You can also access this history from the transaction itself. Click More on the bottom bar and click Audit
History from the menu

Some events are not transactions (perhaps they are actions taken on the vendor or employee list); for these
types of events you can click View to see the history but you can't audit exactly what data has changed

− If you see nothing in the History column, this type of event has no history. This could be a login or logout
event, a setting changed, etc.

− In order for the Audit Log to record a sign-out, go to your company name at the top of the QuickBooks
Online screen and select Sign Out from the drop-down arrow. Time-outs (after the designated period you
have set) or clicking the X button at the top-right of the browser will not prompt the Audit Log to show a
sign-out. This is typical of online banking and most other sites that require a sign-in/sign-out.

− Attempted logins are not recorded

To view more events, scroll to the bottom of the screen and click Next. To print the current view of the Audit Log,
click Print. For best results, select Landscape orientation from your browser's Print dialog box.

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Exceptions to Closing Date Report

This report is an audit history of all changes made after the closing date was set up to transactions dated on or
before the closing date. If you access QuickBooks Online via QuickBooks Online Accountant, this report is found in
Reports  Accountant Reports, if a closing date has been specified in Company Settings.

If your client accesses QuickBooks Online, they can navigate to the Reports screen and locate the Go to report
search field above the report categories tabs. Click that field to open the drop-down list of all reports. Scroll through
the reports to find the Exceptions to Closing Date report. If you have trouble finding it, bookmark the URL:

https://qbo.intuit.com/app/audithistory?view=auditexception.

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This is an interactive report. Click the blue hyperlinked transaction ID number to view the transaction. Time /date
stamps underneath each transaction link show when each transaction was edited and added. Click the arrow next to
the time/date stamp on edited transactions for the highlighted details of what changed. Click the arrow next to the
time/date stamp on added transactions to view the original information.

To use this report, you must have set a closing date in the Company Settings. Once you set the closing date, any
changes to transactions on or before that date are tracked and viewed on this report. Your QuickBooks Online
Accountant’s Client list shows a count of changes to closed books for clients with QuickBooks Online subscriptions.
This will alert you to exceptions before you even log into their QuickBooks Online company.

Save a copy of this report before you set a new closing date by printing it. Once you set a new closing date, your
previous list of exceptions will be lost and you will only be able to track changes that occur after the new closing
date.

CUSTOM BUSINESS REPORTS

Whether readily available in QuickBooks Online or with a little customizing, there are many great reports that will help
you with some standard business needs. Here we will go over how to modify some standard business reports that
are available in QuickBooks Online to use with custom processes for your clients.

Best Sellers and Profitability by Product

There are several reports that will help you determine the best selling products and services by quantity and profit.
Run the Sales by Product/Service Summary report to determine which item is responsible for the highest sales.
Customize the Rows/Columns section to sort in descending order to show highest sales amounts at the top of the
report. If you have products and services categories, this report will automatically group by category showing the
highest sales amounts at the top of each category.

To view detail of this information, run the Sales by Product/Service Detail report. If you use inventory tracking in
QuickBooks Online, you will find this report shows multiple lines per invoice for sales of inventory products because
QuickBooks Online records the sale, the cost and the inventory adjustment and shows them all on this report.

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You can customize the report to see only the one sales line item and not the inventory or COGS lines.

Step-by-Step: See Only One Sales Line Item

1. Click the Customize button.

2. In the Lists section, filter the Distribution Account by selecting All Income Accounts in the drop-down list.

3. Click Run Report. The report should now show only one entry for the sale of each inventory item.

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Now that you know what your bestsellers are, you should verify which are your most profitable. Create a Profit & Loss
by Product/Service report by starting with a P&L and then customizing it.

Step-by-Step: Verify Bestsellers

1. Show Columns by Products/Services.

2. Filter lists for Product/Service = Specified.

4. Add sub-columns for comparison of % of row.

This will show which items bring in the most profit. If you have too many columns, filter your Product/Service list for
specified products, such as your bestsellers or a particular product / service category.

Now you can determine which products are your bestsellers. Keep track of your biggest moneymakers so you'll
know which products to promote and keep in stock and which you might want to consider dropping.

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Open Sales Orders

QuickBooks Online uses estimates to track sales opportunities from a status of pending to accepted until the order is
fulfilled and closed. Run the Reports  All Reports  Review Sales  Estimates by Customer report and customize
it to change the estimate status to Accepted. Save this customized report and schedule it to be emailed to your
operations department regularly so they can work on fulfilling the open orders.

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Inventory Stock

To see which inventory items to reorder, you can modify the Product/Service list to learn which items are out of stock
or running low.

Step-by-Step: Learn Which Inventory to Reorder

1. From the Product/Service List report, click the Customize button.

2. In the Rows/Columns section, click the Change Columns button. Remove Price and Cost from right side
column list.

3. Choose Sort By:Quantity.

4. Sort in Ascending order.

5. Show Negative Numbers in Bright Red.

6. Click Run Report.

This report will show all your inventory items; items with the least on hand will be closest to the top. Those products
and services for which you are not tracking quantity on hand will have no quantity and will fall to the bottom. If you
have too many with no count that are not inventory items, you may want to filter your Product/Service list for specific
inventory products to track quantity on hand. (Remember that using filters to select specific product/service items will
exclude any new product/service items added after the custom report is created.) This report should give you a quick
way to see what items to reorder.

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Non-profit Donor Contributions

Although nonprofit organizations are not managing themselves to make a profit, they do need to make more money
than they spend in order to accomplish their mission. Nonprofit organizations track donations, pledges and grants.
Nonprofits can create end-of-year donation reports to see who their biggest donors are and track their contributions.

Step-by-Step: Breakdown of Contributions Report

1. Choose Reports Accountant Reports Transaction Detail by Account.

2. Click Customize.

3. Set Transaction Date to the needed date range.

4. Set Accounting Method to Cash.

5. Under Group By and Sort By select Customer, Donor or equivalent.

6. Click Change Columns and remove any unwanted fields then click OK.

7. From the left sidebar, click Lists.

8. For Distribution Account select All Income Accounts.

9. Click Run Report.

This report will show a sub-total by each donor. To get each donor's totals on a separate page, you can export the
report to Excel by clicking the Export drop-down button on the top left of the report and choosing the appropriate
version of Excel. You can then put a page break between each donor.

Nonprofits can also send annual statements as donor or pledge reports. The statement works only for nonprofits
which use invoices, not sales receipts or deposits. These annual statements are useful for entities that need to send
activity reports to their donors but don’t want to show a running balance or an amount due.

Step-by-Step: Create Transaction Statements

1. From the plus sign icon (+) select Statement.

2. Select Transaction Statement as the statement type.

3. Enter the statement date, perhaps the end of the year.

4. Select All as the Customer Balance Status.

5. Select the start and end dates and click Apply.

6. Click Print or Preview in the lower menu bar to view the selected donors’ statements. On each statement you’ll
see two columns: one for amount billed and one for amount received. Sub-total at the bottom of the report
shows the total received.

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7. Click Save and Send.

8. (Optional) Click Print or Preview to print the statements.

If you start from Create (+)  Statement, you can’t individually select customers for statements. To run statements
only for specific customers, navigate to the Customer Center, check the box for each donor, then click the Batch
actions button and select Create Statements for the selected donors. Update the statement criteria as specified in
the steps above.

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Cash Balance

Some situations call for a regular report to watch the register balances on bank accounts. Perhaps the principal or
controller is looking for a regular report of the bank balance including any future recurring transactions to the account
in order to determine available funds.

Run the Reports  Accountant Reports  Account List report in QuickBooks Online and customize it to report only
on accounts of type All Bank Accounts. Change the columns to show the ones you want.

One of the columns on the Account List report is the current ending register balance, regardless of date. You can
save and schedule this report to be emailed to those who regularly watch the booked cash balances.

Transaction Count

Sometimes we need to get a transaction count for our clients’ QuickBooks Online companies. Maybe you want to
compare the number of financial transactions a year ago to the current count. To get a count on the total number of
transactions, run the Reports  Accountant Reports  Transaction List by Date report. Since this is a list by date
and not account, it will only show one line per transaction. Select the appropriate date range and run the report.
Since this is a list report it will not give a total. Instead, export to Excel where you can read the row number (minus
the five header rows) or use the Count function to give you the total number of transactions.

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Topic 2: Complex Problem Solving

Business decisions that impact the direction of the company are often based on financial information. Financial
information is only as good as the data that is recorded. Improper setup or procedures can negatively affect a
company’s reports, decisions and direction. Designing, implementing, maintaining, troubleshooting and analyzing an
efficient financial management system requires a unique mix of knowledge and experience. In this section we’ll look
at tools to discover errors and solutions for fixing them.

DATA REVIEW AND CLEANUP

Whether working with a new client or performing a periodic check-up, ProAdvisors offer a valuable service to
businesses when they perform a data review to check on the health of the company’s data and offer solutions to fix
mistakes found. Be sure to document your notes and proposed solutions as your deliverable for the data analysis
service and as guidance should you be engaged to perform the cleanup work.

Review Account Balances

A good place to start troubleshooting is by reviewing a company’s financial statements, the balance sheet and Profit
& Loss Statement.

Review the Balance Sheet

Consider using QuickBooks Online Accountant’s Trial Balance tool to help with some of the steps.

Verify account balances

− Is the balance sheet in balance?

− Do they match prior year balances?

− Do they have appropriate debit or credit balances for their account type?

− Are any balances improperly negative?

Were bank accounts reconciled recently?

Undeposited funds – Is there a balance and how recent is it?

Accounts Receivable – Verify against a Customer Balance Detail report for the same end date with aging method
by report date; look for obvious errors like payments and credits not applied to invoices

Inventory – Verify against Inventory Valuation Summary report total; look for obvious errors like negative inventory

Fixed assets – Review the activity in the accounts to confirm that accumulated depreciation is being posted each
year; look for small amounts that should be expensed, etc.

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Accounts Payable – Verify against an Unpaid Bills report for the same end date with aging method by report
date; look for obvious errors like payments and credits not applied to bills; look for credit card vendor balance
representing activity that should be applied to credit card liability account instead

Credit Cards – Examine activity: if the client entered activity as credits instead of charges, verify recent
reconciliation

Payroll tax payable – Verify against payroll liability reports to determine whether accruals are appropriate and
payments are applied

Sales tax payable – Verify against sales tax return and sales tax liability reports

Loan account – Confirm principal and interest has been allocated appropriately and interest payment is not
applied to principal. If the interest accrual was recorded to this account, then the entire payment should be
recorded here. If only the principal portion due on the loan is recorded to this account, then the payment’s
interest portion should be recorded to interest expense.

Equity accounts – Look for reasonable balances and activity and accounts based on entity type; confirm
Opening Balance Equity account is zero

Review the Profit & Loss Statement

Do all accounts have appropriate debit or credit balances?

Are account names appropriate, not customer or vendor names?

Recognize whether it’s important for the business to use proper workflow for sales transactions. Determine
whether they should be recording income with invoices and sales receipts using products/services items vs.
recording income via deposits without product/service items. Your P&L may be correct if you post a bank feed to
an income account but your sales reports won’t be. Using sales forms will give you accurate Customer
Dashboard activity, Accounts Receivable reports, Sales by Product reports and Sales by Customer reports. You
can still use the Banking screen to record and/or match payments and deposits. However, for some small
entities, the sales processing may be overkill and it may be appropriate to record income without product/service
items.

Income accounts – Assess for proper sales activity

Cost of goods sold – Assess for proper direct cost activity related to the cost of producing the product or service
sold

Expense accounts – Assess for proper indirect cost activity; verify payroll expenses against payroll reports

If class or location tracking is used, verify transactions are appropriately categorized

If accrual accounting is used, verify the matching principle, that income and matching costs are recorded at the
time the product or service was provided, and that expenses were recorded when they were incurred. This
reduces timing mismatch and allows for better analysis of profitability.

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Examine the Chart of Accounts List

Businesses often have huge account lists that need to be cleaned up or merged. Based on your experience and
training, determine whether the Chart of Accounts is too long or complicated, if there are duplicates or any accounts
have been set up as incorrect types. The account type controls the presentation for financial reports.

Use the Audit Log to filter and search for changes to lists and look for changes to accounts since the last review. Edit
accounts to make changes as needed. Delete unused accounts to make them inactive. Accounts can be re-
activated; they are never actually deleted. Merge duplicate accounts to move all financial transactions from one
account to the other, thereby combining activity into one account. The information will remain for the account to
which the name is being changed; the other account will be marked as inactive. Be careful: merging accounts is not
reversible and you are potentially changing prior year information by moving it to another account. The account detail
types must match in order to merge.

If a P&L account with activity is deleted, the account will show on reports with (deleted) appended to the end of the
name. If you discontinue use of an expense account in a current year and delete the account, when you run a prior
year P&L it will still show this category with (deleted) in the name.

If a Balance Sheet account with a balance is deleted, QuickBooks Online will give you an error message that there is
a non-zero balance. The proper procedure is to reclassify the balance before deleting the account. When a balance
sheet is run for prior periods when the account had a balance, it is shown on the report with (deleted) appended to
the end of the name.

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Examine Product/Service Items

Similar to the Chart of Accounts, product/service items also need to be reviewed to determine whether the list is too
long, if there are duplicates and if they are set up properly. Product/service items are linked to general ledger
accounts. It is recommended that you review the Item list and the associated accounts at least annually to help you
uncover financial reporting errors.

A double-sided item is linked to both an income and an expense account. When used on a sales form, it posts to the
income account. When used on a purchase transaction, it posts to the expense account. A common error in the Item
list is the item has not been set up as a double-sided item. When the expense side is not set up on a double-sided
item, users cannot select it on a purchase transaction form from the Product/Service field when recording
expenditures. Inventory replenishment and costs may not be recorded consistently and Sales and Purchase
Profitability and Product/Service Item reports are incomplete.

On the Products and Services list, click the grid gear icon to select the Expense account column. With both the
Income and Expense account columns now showing, you can view any product/service items that do not have an
expense account designated and easily edit the item.

If you change the income or expense account associated with a product/service item, a checkbox will appear to
check if you also want to update this account in historical transactions for this product/service item. When you click
Save and Close, if any of the historical transactions are dated before the current close date, you will be prompted to
click Save again to make this change if involving transactions prior to the closing date.

If the item is an inventory item, QuickBooks Online will allow you to change the Inventory Asset, Income or Expense
account, but it will not give you the checkbox option to affect historical transactions; rather, it will affect all historical
transactions automatically. It will prompt you to click Save again to make this change if involving transactions dated
prior to the closing date. If the item is used in a prior period, it will affect prior period numbers.

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Undeposited Funds

The Undeposited Funds account is a holding account for payments received until they are taken to the bank and
deposited. When a customer payment is received, the Deposit to account typically should be Undeposited Funds.
Then a deposit is recorded to group one or many customer payments together and move them from Undeposited
Funds to the bank account. The setting for Deposit to on the sales receipt and receive payment form is “sticky.”
Once saved, the next time you open the screen it will default to the last account used.

Some businesses do not understand the Undeposited Funds workflow and make mistakes using this account. The
most common error is businesses will record a payment against a customer invoice and post it to Undeposited
Funds — so far, so good. Then they will record a deposit and post it to income. Now income has been recorded
twice — once by the invoice and once by the deposit. This can be easy to do on the Banking screen if the deposit is
for a group of amounts that QuickBooks Online can’t recognize, and the user doesn’t click Find Match to group them
but instead adds them as income. This mistake causes Undeposited Funds and Income to both be overstated and
leads to a growing balance in the Undeposited Funds account. When the Undeposited Funds account has a balance
at the end of a period, you must determine which payments have not yet been recorded as deposited in order to
confirm whether or not they are current and the deposit is really pending.

Before you start troubleshooting, it helps to make sure the bank account is reconciled so you can delete any
duplicate deposits that may be recorded. There are several ways to identify which payments need to be grouped and
recorded on a deposit transaction.

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Step-by-Step: Identify Payments to be Grouped and Recorded

1. Drill into the Undeposited Funds account on the balance sheet to view the detail and running balance. Start
exploring from the line where the last running balance was zero.

2. Navigate to the Undeposited Funds register and look for lines that do not have an R for reconciled.

3. Open a new Deposit transaction and view the undeposited payments received at the top of the screen waiting to
be incorporated into a deposit.

4. Once you find the payments that need to be deposited, you must find the deposits that should have included
these payments. Search the Banking screen’s In QuickBooks tab to find the downloaded bank transaction for
this deposit and click the link to find out how it was recorded. This should open a Deposit screen, likely posted to
an income account. You should see the outstanding customer payment received at the top of the screen.

5. Check the box next to the customer payment and delete the line below recording the duplicate income.

6. Save and close. This will not affect the deposit’s reconciled status.

Applying each payment to its proper deposit is time consuming but is the most accurate. As long as you don’t
change the deposit date or deposit total amount, this will not disrupt bank reconciliations that include the deposit.
Before you begin, make sure it is acceptable to adjust the numbers for the periods where the deposit to income was
originally recorded. When you apply the deposit to the payment and delete the income line, the income for that
period will be reduced.

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If there is an overwhelming number of payments in the Undeposited Funds account, too many to fix individually, the
decision may be made to group them together for adjustment and reduce income for the total amount. You can
group them by month or group all of them together in one adjustment. Create a new deposit, select each
undeposited payment in the upper section of the screen, enter the appropriate income account(s), descriptions and
amounts in the lower section’s account line items as negative numbers to offset the total then confirm the total
deposit is $0. This will have no effect on the bank account and will reclassify the undeposited funds amount against
the incorrectly recorded revenue.

NOTE: It is important to explore and confirm that the original deposits posted directly to income accounts and
not applied to payments were, in fact, posted to the same income accounts against which you are offsetting
the undeposited funds, or else post to an income adjustment account to group them together as unspecified
to a particular revenue line.

Undeposited Funds should have a debit account balance when holding customer payments that have not yet been
taken to the bank. If you have a credit, this may indicate the deposit was dated before the received payments, in
which case you should investigate to correct the dates.

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Inventory

QuickBooks Online allows you to sell inventory products on sales forms even when there is not sufficient quantity on
hand. There is no setting to prevent this. When you record an invoice for sales of product with negative inventory,
QuickBooks Online guesses at the cost based on historical activity then records that as a decrease to Inventory
Asset and an increase to Cost of Goods Sold.

When the purchase is made to replenish the quantity on hand, whether the purchase is dated before or after the
invoice that recorded the sale of negative inventory, QuickBooks Online will automatically adjust the inventory cost for
that invoice appropriately, based on the new purchase cost. The problem occurs if the quantity on hand is never
replenished properly. Then the inventory asset value and costs are not reliable because they are based on
QuickBooks Online’s guess at the time the sale and cost were recorded.

Review the Products and Services list or the Inventory Valuation Summary report and look for total inventory counts
in the Quantity column. If you find negative total inventory, run an Inventory Valuation Detail report for that product.
The QTY column represents the count of product bought or sold on that transaction. The Quantity column represents
the running count of product on hand. Review the transaction detail for negative inventory products to find how far
back the negative inventory quantity goes. Work with your client to determine whether this is a current issue easily
resolved with a vendor bill, or whether this involves adjustments to prior periods. Train your clients to verify sufficient
quantity on hand before recording sales.

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Examine the Opening Balance Equity Account

The Opening Balance Equity account is a clearing account used during the QuickBooks Online company setup for
pre-existing businesses with account balances. Confirm the balance of this account is zero. As you enter each
beginning balance into QuickBooks Online, the offsetting entry is posted to Opening Balance Equity. The task of
entering beginning balances into the new QuickBooks Online company is not complete until this account’s balance
is zero.

When a new Balance Sheet account is added to the Chart of Accounts, there is a field called Balance. This field
should not be used outside the initial company setup. If an amount is entered into this field, QuickBooks Online will
create an offsetting entry to the Opening Balance Equity account. Train your clients not to use this field. Instead, the
initial balance of the account should be recorded using the proper transaction types representative of the activity that
occurred.

Similarly, when a new bank account is connected to online banking in the Banking Center, if there are no
transactions posted to the register in QuickBooks Online, then QuickBooks Online will record the opening balance
with an offsetting entry to the Opening Balance Equity account. This transaction should be deleted and replaced by
the transactions that represent the financial activity in that bank account.

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When a new inventory product is added and the initial quantity on hand is specified in combination with the product
cost, QuickBooks Online will create an adjustment to record the inventory asset value with an offsetting entry to the
Opening Balance Equity account. Train your clients not to use these fields. Instead, the initial value of inventory
products should be recorded using a purchase form such as a bill, check, expense or credit card charge to specify
the quantity and cost of the product at time of purchase.

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To troubleshoot and fix a balance in the Opening Balance Equity account, go to its account register. Look at the
running balance column to determine when the account was last zero, if ever. Was the initial account setup
completed properly with a zero balance? If the Opening Balance Equity account was not zero at the time of setup of
the QuickBooks Online company, gather supporting documentation for the beginning balances and refer to Module 1
in this course to determine which balances were not recorded at setup and record them in the first available open
period. You may need to consult with the tax accountant to collaborate about the best course of action.

If the company was set up properly, there may have been some opening balance adjustments automatically recorded
by QuickBooks Online when a new account or inventory product was entered. The register allows you to delete these
adjusting entries. Based on the date and effect on the accounting, determine whether it makes sense to delete the
adjustment and record the appropriate detailed transactions instead. Otherwise, make an adjusting entry in the
current period to record the proper offsetting entry.

Example 1: if a new bank account was funded by a capital contribution from an owner, and the new Chart of
Accounts bank account was set up and the opening balance entered, the offsetting entry made to Opening Balance
Equity needs to be reclassified to the Owner Contribution equity account.

Example 2: if a new inventory product was added and the initial quantity on hand was recorded on the product
screen, determine whether the vendor payment for the purchase of the goods was recorded as a duplicate, or not
recorded at all, in order to decide your course of action. If in a current period, delete the initial inventory adjustment
and record the vendor purchase, if not yet recorded.

When a new customer or vendor is added in QuickBooks Online, there is a field called Opening Balance. This field
should not be used. If an amount is entered in this field when a new customer is added, QuickBooks Online will
create an invoice for that using a Service item and posting to income. If an amount is entered in this field when a new
vendor is added, QuickBooks Online will create a new bill for that vendor in that amount posted to the Miscellaneous
Expense account. Review the account associated with the Service item and the Miscellaneous Expense account for
any activity like this. It is not the proper way to record a beginning balance. Instead, the actual revenue and expense
should be recorded with proper accounts and reference numbers when the beginning balances are entered onto the
books and washed through the Opening Balance Equity account.

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Reclassify Transactions

When the bank and credit card accounts are properly reconciled, this is a good sign that the source data is properly
categorized. After reviewing the financial statements you may find that the target data — the distribution accounts
where the bank and credit card activity was coded — may need to be reclassified.

Use QuickBooks Online Accountant’s Reclassify Transactions tool to do this work. It’s a secret weapon that lets us
find and fix errors quickly and efficiently. Use this tool to review Balance Sheet and Profit & Loss accounts, then to
reclassify target activity to different accounts and classes, not locations or customer jobs. These are denoted by a
green-light icon on the transaction row. You may not reclassify an item-based transaction’s account using this tool;
only the class may be reclassified in item-based transactions. These are denoted by a yellow-light icon. Source
activity cannot be reclassified using this tool and is denoted by a red-light icon. Be careful: there is no prompt when
you change a transaction before the closing date.

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Purging Data

If you’re within the first 60 days of a QuickBooks Online subscription, you can delete all of the existing data and start
over from scratch. If you converted from QuickBooks Desktop, simply send the data from Desktop again and it will
replace all data in the QuickBooks Online company. If you did not convert from QuickBooks Desktop, and your
QuickBooks Online subscription is Essentials or Plus, you can purge a company. This process will delete all
transactions and reset your file to brand new. It is a best practice to first export the data to a QuickBooks Desktop file
saved as an archive.

Step-by-Step: Purge Data

1. Click on the Home tab.

2. On the URL, replace the homepage with https://qbo.intuit.com/app/purgecompany.

3. Press Enter. You will be directed to a confirmation page where you have to type Yes in the box and click OK.

4. On the next screen, if the industry you want is different from the one showing, change it and mark whether you
would like the system to create accounts based on your industry or start with an empty Chart of Accounts.

5. Click Wipe Data.

You cannot undo this. Proceed with caution. If there is payroll data in the company, it will have errors doing this.
When the deletion is complete, you will be rerouted to your home page. If your QuickBooks Online subscription was
started more than 60 days ago, you will need to cancel your current subscription and start a new company in order
to start from scratch.

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BANKING AND RECONCILIATION TROUBLESHOOTING

An integral part of closing the books is confirming all transactions have been entered and reconciling the balance
sheet accounts to their supporting documents. Let’s take a closer look at banking and reconciliation troubleshooting.

Bank Activity

Cash flow is important to every business. The Banking feature in QuickBooks Online is one of the most effective
forms of watching your cash flow by linking to your bank balance and bank activity to automate your workflow.
Clients need help setting up and using Banking to avoid adding duplicate transactions to the general ledger and to
take advantage of its obvious efficiency.

You can use the Banking function primarily to add transactions or as a safeguard to match and verify all transactions
have been recorded against bank activity.

Part of being an Advanced QuickBooks Online ProAdvisor is knowing when the client is not using features properly.
Teach your clients how to use the QuickBooks Online Banking screen. Show them the three tabs and explain
banking activity that is synced or uploaded into QuickBooks Online is:

First added to the New Transactions tab waiting to be entered or matched

Once added or matched to a transaction, it can then be found on the In QuickBooks tab

If it has not been added or matched, it can be excluded and will be moved to the Excluded tab where it can stay
or be deleted

The goal is to clear the New Transactions list. Explain to your clients how to work with New Transactions.

Adding bank activity creates a new transaction, and debits and credits the general ledger

− If your customer uses class, location or job tracking, they can do this from the Banking  New Transactions
grid (these fields will be available to populate if the appropriate setting is activated in Company Settings for
each of these features)

− Click the Split button to allocate the bank activity among multiple accounts, classes or locations

− Use the copy description setting from the banking grid’s gear icon to pull the downloaded bank activity
description automatically onto the transaction’s memo field

− For best reporting results, if your clients use product/service items or sales tax, teach them not to add sales-
related income or purchase-related expenditures from here; rather, teach them to use proper sales and
purchase forms instead

Matching links the bank activity to a previously entered transaction or to an open transaction to close it

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Transfer creates a new transfer transaction that records the movement of funds between two Balance Sheet
accounts and allows you to attach the linked bank activity from both accounts; there is no option to split among
more than two accounts

QuickBooks Online often recognizes downloaded banking activity. On the New Transactions tab, you can work with
All activity, or Recognized activity. Recognized activity is shown in green in the Category or Match column. Generally,
the Recognized activity is:

– Bank activity that QuickBooks Online determines is a match to a transaction already posted to the
GL. QuickBooks Online will suggest you match this activity to the transaction. A green match is a direct match to
one transaction. A gray match means there are multiple options.

– Bank activity that QuickBooks Online determines fits the parameters of a rule you have set up.
QuickBooks Online will suggest you add this transaction as defined by the rule

Account name – Bank activity that QuickBooks Online determines is similar to activity you have categorized in a
specific manner previously. QuickBooks Online will suggest you add this transaction as you did last time.

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Advanced Matching

Matched transactions are the pairing of a financial transaction that debits and credits the account on your GL with
the corresponding downloaded bank activity. This is an important concept to explain to your clients. From the
Banking screen, find matched transactions in the Banking  In QuickBooks tab. This is useful when troubleshooting
and searching for the transaction with which your bank activity is associated. When bank activity is matched to
multiple transactions, QuickBooks Online will show that detail by clicking that link. If you are on a transaction screen,
you will see the hyperlink in the upper left that shows you this transaction is linked to a bank download. This linking
further confirms the likelihood that the transaction did occur. Click the link to see the details of a bank download.

On the New Transactions tab, remember the Add and Match functionalities are suggestions. When you add a
transaction for a vendor, the category is remembered and suggested next time activity from that merchant is
received. When QuickBooks Online finds a match, it is searching for an existing transaction with a similar date and
same amount. In both cases, consider these suggestions that help automate your workflow, but be sure to change
them if they are not correct.

The Match feature has advanced capabilities that allow you to change the suggested match, search for another
match, and create closing transactions to record the Receive Payment to close an open invoice or record the bill
payment to close an open bill. When QuickBooks Online suggests a matching transaction that is incorrect, click the
row to expand it and select one of the other possible matches or select Find other matching transactions. When
QuickBooks Online does not suggest a match, click the row to expand it and select Find match.

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The Match Transactions screen will drop down and allow you to search for the appropriate transaction(s) from a list
of open transactions that have not been previously reconciled or linked to another bank activity. Select from the
Show drop-down menu to filter the list by specific transaction types.

If you make multiple selections and they do not equal the amount of the bank activity, you have the opportunity in the
bottom right corner of the Match Transactions screen to resolve the difference by adding a new transaction. When
you save the selected matches, QuickBooks Online links the bank activity to each selected transaction, including the
new transaction.

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For money coming in, when you match bank activity to an invoice, QuickBooks Online will record the payment
received directly to the bank account and link the bank activity to it. If an invoice’s payment has already been
recorded as received but not deposited, matching the bank activity to the payment will record the deposit and link
the bank activity to it. For money going out, when you match the bank activity to a bill, QuickBooks Online will record
the bill payment and link the bank activity to it.

In the case of recording bank activity to a group of open transactions, when you match the bank activity to multiple
invoices, QuickBooks Online records the multiple payments received directly to the bank account. It does not record
the payments to Undeposited funds grouped into a deposit transaction so the bank register detail and reconciling
items do not exactly match the bank statement.

TIP: To select a group of bank activity, check the first row in range, hold Shift, check the last row in range
and all boxes between the clicks will be checked. Or you can hold CTRL while checking the boxes of the
rows you want to select. Then click, for example, Batch actions  Accept Selected and you’ve saved
yourself a bunch of clicking. Similarly, you can select several transactions and specify the vendor and
categorization all at once. Or exclude a batch of duplicate transactions.

IMPORTANT: Bank downloads cannot match to reconciled transactions. Teach your clients to do all of their
banking work before they reconcile.

Rules

You can set up rules to tell QuickBooks what to do with downloaded bank activity that meets particular conditions.
Rules help you control, customize and automate how you use the Banking screen in QuickBooks and speed up
accepting new transactions. You learned about Bank Rules in basic certification training. Let’s learn a bit more
about it.

Rules go beyond automatic processing to give you a finer level of control. Rules tell QuickBooks what to do with
unaccepted bank transactions that meet particular conditions. They scan downloaded bank activity for certain criteria
you define, then assign pre-specified data such as payees, categories, classes and locations to them. Rules can
even help automatically split items between categories by percentage or dollar amount. Because they can be specific
to money-in or money-out transactions and/or for specific bank accounts, they are a very powerful way to script how
QuickBooks should handle downloaded transactions.

You can build layers of conditions into a rule; this means an item has to meet several conditions before the rule is
applied. You build complex rules using either and or or conditions. You can’t create a rule that uses both. For rules
using and, all conditions must be met. For rules using or, only one of several conditions must be met.

Rules are not case sensitive. You don’t have to create multiple rules to accommodate upper-case and lower-case
variations in the description and bank text conditions.

Rules are applied in the order listed on the Manage Rules list. You can change the order by dragging them up or
down.

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NOTE: The effect of editing and moving rules sometimes takes a while to appear, both in the New
Transactions list and on the Rules list.

Auto-added Rules

When adding details to an unmatched transaction in the New Transaction window, QuickBooks will often try to add a
rule for you. Usually it is a good idea to select Edit this setting and adjust the rule by selecting Create Custom Rule, or
check the box to Leave the activity uncategorized in the future, useful on downloaded bank activity descriptions like
Wire Out that would change categorization with each instance.

Step-by-Step: Add a Rule Manually

1. In the navigation bar, select Transactions  Banking.

2. Click the down arrow on the Update button and select Manage rules.

3. Click New rule.

4. Enter a descriptive name and select whether the rule is for a money-in or money-out transaction. Rule names
can have only letters, numbers and spaces.

5. Select the bank accounts and credit card account to which the rule applies.

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6. Set up conditions QuickBooks should look for when it downloads bank items. Contains is a key operator since it
allows all kinds of transactions to be assigned to one set of actions. For example, FedEx transactions can come
across with many different descriptions.

SELECT FIELD SELECT OPERATION ENTER CONDITION

Bank Text Contains Text

Doesn’t contain

Description Contains Text

Is exactly
Doesn’t contain

Amount Equals Numbers only

Is greater than
Is less than
Doesn’t equal

7. Set the action QuickBooks should take when the conditions are met. You can assign:

− Transaction type

− Payee

− Category

− Tax code (if applicable)

− Class

− Location

− Memo

8. (Optional) Click Split if you want the rule to divide a bank transaction between different categories, tax codes or
classes. You can assign splits by percentage or amount. To add more lines click Add line.

9. Click Save.

QuickBooks applies the rule to unaccepted transactions and displays in any rows that meet the conditions you
specified. You just need to Add them to QuickBooks, if the rule is appropriately applied.

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Importing Rules

You can also export rules from one QuickBooks Online account and import them into another. Perhaps you have
customers with similar transactions. Perhaps your firm has created a template of standard rules to use on clients.

Step-by-Step: Import Rules

1. On the Rules screen, click the down arrow on the New rule button to access the Export rules function.
QuickBooks exports these as an .xls file.

2. In the new QuickBooks Online company, navigate to the Rules screen and click the down arrow on the New rule
button to choose Import rules.

3. Browse to select the exported .xls file and click Next. QuickBooks will give you a list of all of the rules from that
.xls file to choose which ones you want to import.

If the rule details don’t map directly, you’ll be given a chance to map payees, categories and classes in the next
section.

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Managing Rules

Access the Rules screen to manage your rules directly by clicking the down arrow on the Update button on the
Banking screen.

You can:

Edit a rule

Copy a rule

Delete a rule

Modify how rows appear on the page

Step-by-Step: Edit a Rule

1. From the Rules page, click Edit at the end of the row of the rule you want to change.

2. In the form that appears, make the changes you want then click Save.

Step-by-Step: Copy a Rule

1. From the Rules page, click the down arrow next to Edit at the end of the row of the rule you want to change and
select Copy.

2. In the form that appears QuickBooks automatically adds Copy of to the existing rule name.

3. Make the changes you want and click Save.

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Step-by-Step: Delete a Rule

1. From the Rules page, click the down arrow next to Edit at the end of the row of the rule you want to delete.

2. Select Delete from the list.

Step-by-Step: Modify the Appearance of Rows

1. From the Rules page, click the gear icon just above the table on the right.

2. Select how many rows of rules you want to appear on the page: 50, 150 or 300.

3. Click Compact if you want to shorten the row height so more rules appear onscreen.

4. Click outside the selection box to return to the page.

Modify the Order of Rows

Rules are applied in numerical order. You can apply only one rule per transaction. Reordering lets you control which
rule to apply. For example, perhaps a company wants to first apply a rule to categorize a purchase from a particular
store to office supplies expense if the purchase is less than $500. If the purchase is greater than $500, the company
may wish to categorize the purchase to fixed assets. From the Rules page, drag in the left-most column up or down
to reorder.

Banking: Delete Bank Activity

When an account is disconnected from the bank, the bank’s card or tile in the upper section of the Banking Center
will disappear. With it, all bank activity in the New Transactions tab that has not been added or matched will be
deleted from the Banking grid.

Any bank activity that was matched to transactions will remain matched. You can navigate to the bank or credit card
account’s register to find transactions with the online banking match icon and click on it to edit the transactions and
view details of the match.

When an account is not disconnected from the online bank, but duplicated bank activity has been uploaded into
QuickBooks Online, you can exclude the bank activity from the New Transactions tab then delete it from the
Excluded tab.

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Banking: Batch Actions

Step-by-Step: “Work” the Bank Feed

1. Click New Transactions in the Banking Center.

2. Click Recognized to view activity related to matches, rules and other suggestions.

3. Sort the banking grid by the Category or Match column.

4. Find the group of green Match activity. Click each row to review details.

a. Check the box in the first row in the group, hold the Shift key and check the last row in the group. All boxes
between the rows checked will be selected.

b. De-select any that you do not want to match.

c. Click Batch actions  Accept Selected.

5. Find the group of green Rule activity. Click each row to review details.

a. Check the box in the first row in the group, hold the Shift key and check the last row in the group. All boxes
between the rows checked will be selected.

b. De-select any that you do not want to match.

c. Click Batch actions  Accept Selected.

6. Find the remaining bank activity with green suggested account categories assigned. Click each row to review
details and modify as needed.

a. Check the box in the first row in the group, hold the Shift key and check the last row in the group. All boxes
between the rows checked will be selected.

b. De-select any that you do not want to match.

c. Click Batch actions  Accept Selected.

7. Click the All button to view the remaining banking activity that was not recognized.

8. Sort the banking grid by the Category or Match column.

9. Find any group of gray Match activity. Gray matches mean QuickBooks Online has found more than one
transaction. Click each row to view the options and select the proper transaction to match the bank activity.

You can match these one at a time, or select several.

a. Check the box in the first row in the group, hold the Shift key and check the last row in the group. All boxes
between the rows checked will be selected.

b. De-select any that you do not want to match.

c. Click Batch actions  Accept Selected.

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10. Sort the banking grid by the Description column to sort the bank activity by merchant description.

11. Find any group of merchants that would potentially be coded the same.

a. Check the box in the first row in the group, hold the Shift key and check the last row in the group. All boxes
between the rows checked will be selected.

b. De-select any that you do not want to add.

c. Click Batch actions  Modify Selected.

d. Specify the payee (vendor), category, class and/or location. (Customer and billable are not available in this
batch action — only on individual rows.)

e. Click Batch actions  Accept Selected.

12. Select any banking activity that is a duplicate or for some reason needs to be excluded. Click Batch actions 
Exclude Selected.

13. Click Excluded.

a. Select any transactions that were uploaded into QuickBooks Online as duplicates.

b. Click Batch actions  Delete.

Reconciliation Logic

When a Balance Sheet account is reconciled, the reconciliation report acts as the supporting documentation that ties
the ending bank balance to the QuickBooks Online account ending balance. This report lists all the details about
which transactions were reconciled and which were not at the time of the reconciliation. There are a few things to
know about how this report works.

The balance on this report is the balance of all the reconciled transactions, while most other reports show
account balance based on posted transactions (reconciled transactions are those with the status R in the
register)

This is a static report; if information on this report has changed, that change will not be reflected on this report

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Step-by-Step: Print a Previous Reconciliation Report

1. Navigate to the Reconcile screen.

2. Use the drop-down menu to select the account.

3. Find the proper row and click the hyperlinked data on that row to view its reconciliation report (except the
hyperlink in the Changes column).

If the reconciliation was before 9/24/2010, it may not show (before that date, this feature wasn't available). Also, if
you've imported your data from the Desktop version of QuickBooks, previously memorized and saved reports won't
convert, so those period reconciliation reports will be unavailable.

The Reconcile report in QuickBooks Online is one of the few reports that can't be directly exported to Excel. However
there is a simple workaround to accomplish this.

Step-by-Step: Copy Report Information into Excel

1. Find the Reconcile report you want to print.

2. Highlight the information on the report.

3. Right-click and copy the information.

4. Open Excel and paste the information.

5. Adjust the column widths for the format of the Excel report to show all the information.

6. Click Save.

When you open a register (Banking  Registers or Transactions  Registers) you’ll see a narrow column with a
checkmark at the top. This column indicates the reconciliation status of each transaction.

Transactions with the status R in the checkmark column represent reconciled transactions

Transactions with the status C represent transactions that have cleared the bank by being checked in a not-yet-
completed reconciliation or by a downloaded bank activity linked to the transactions

Transactions with a blank status have not yet cleared or been reconciled

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When an account won’t reconcile, there are two areas to troubleshoot to find your solution.

Beginning Balance – When you begin a new reconciliation, QuickBooks Online asks for the statement ending
date and balance. It does not ask for the beginning balance. Instead it shows the calculated beginning balance.
This is not a static, memorized number based on the ending balance you entered on the last reconciliation.
QuickBooks Online calculates this beginning balance the moment you begin a new reconciliation. It is the sum of
all the transactions posted to the account with any date prior or future that is marked as reconciled. Transactions
can be marked as reconciled by being checked off in a reconciliation that is completed or they can be marked as
reconciled by changing their reconciliation status directly in the register from a blank or C to an R. You can view
the reconciliation status of a transaction from the register. Transactions with the status R affect the beginning
balance on a reconciliation.

− If you accidentally clicked a line in the register and marked an unreconciled transaction as R and saved it,
this will affect your beginning balance

− If you accidentally clicked a line in the register and marked a reconciled transaction as C (cleared) or blank,
this will affect your beginning balance

− If you deleted a previously reconciled transaction, this will affect your beginning balance

Confirm the beginning balance calculated by QuickBooks Online matches the beginning balance of the bank
statement. If it is different but the reconciling items that correct it are going to be checked off during the
current reconciliation, this can work too.

Current Reconciling Items – When your bank account is connected to your online account, downloaded activity
added and matched to a transaction marks the transaction with a C for cleared. When you reconcile the
account, you’ll find that these cleared transactions already have a checkmark next to them. This usually makes
your reconciliation quicker. Sometimes it doesn’t work and you’ll need to select all transactions and clear all
check marks. Then retry checking off each transaction that cleared on the bank statement. Look for future dated
transactions also. You may need to uncheck the box on the Reconcile screen so you don’t Hide transactions
after the statement’s end date, in case a future-dated transaction is causing the discrepancy. Your beginning
balance plus the reconciling items on your bank statement must equal the ending balance on your bank
statement.

− Verify whether you typed in the ending date and balance correctly

− Check off every transaction on your bank statement as you check it off in QuickBooks Online to make sure
all bank activity is accounted for in QuickBooks Online in order to get QuickBooks Online to match the bank
statement

− Verify whether a transaction was posted in QuickBooks Online after your statement ending date but was still
included in the bank statement (because it actually hit the bank earlier)

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Changed Reconciled Transactions

Now that you understand all reconciled transactions affect the opening balance, here are the steps to help locate the
discrepancy.

Step-by-Step: Locate Discrepancies

1. On the Reconcile screen, select the bank account and view the list of previous reconciliations. The top line is the
most recent reconciliation.

2. Spot-check the amount in the Ending Balance column. This was the last amount reconciled to. This should
match your last bank statement. This is what your new reconciliation's beginning balance should be. If it's not,
and QuickBooks Online is calculating a different amount as your beginning balance, there may have been some
changes to reconciled transactions in QuickBooks.

3. Look in the Changes column. If you see an amount on any row, click it to view details.

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The Changed Transactions screen shows you a list of transactions that have been reconciled, and have either
changed amount, been deleted, changed bank account, become unreconciled or been modified in some way to
affect the prior reconciliation.

You can fix the transactions or, if deleted, add them back in. Or maybe you deleted one because you had a duplicate
and you don't want to add it back in, you just want to mark the duplicate as reconciled. You can fix the reconciliation
status in the register or, if you have several to fix and want a record of it, you can start a new reconciliation with the
same ending date as last period and the same ending balance then put check marks by the transactions that need to
be marked as re-reconciled.

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Changed Unreconciled Transactions

The Changed Transactions screen does not show you what has happened to transactions that were not previously
reconciled. If an unreconciled transaction (past or future) was accidentally marked as status R on the register, this will
affect your beginning balance and will not show on the Changed Transactions screen. When you are questioning the
balance of one of your accounts, a discrepancy report is normally the quickest way to find what has changed.

Step-by-Step: Run a Discrepancy Report

1. From the Chart of Accounts select the proper bank account and click Report.

2. Click the Customize button.

3. Set the Transaction Date to All Dates.

4. Under Rows/Columns click change columns.

5. In the box on the left, double-click Last Modified to add it to the report and click OK.

6. Click the drop-down menu next to Sort by and choose Last Modified.

7. Set the Sort in to Descending order.

8. Find the date that the last reconciliation was completed. Not the bank statement’s ending date, but the date the
reconciliation task was performed in QuickBooks Online. This can be found on the Reconcile screen and on the
Reconciliation Report.

9. In the Dates section set Last Modified Date to that date in the From box, to run the report for changes that
happened only after that date.

10. In the Status section set Cleared to Reconciled.

11. Click Run Report.

This report will enable you to look for previously unreconciled transactions that have now been marked as reconciled
since the date of the last reconciliation.

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Reconciliation Adjustments

Let's say your opening balance is correct but you have some old unreconciled transactions in QuickBooks Online
which you know have already cleared the bank and appeared on a prior bank statement. They are not on the current
bank statement. If you mark them as reconciled in the current reconciliation you won’t reconcile.

Since your opening balance matches the bank statement, one or more of these old transactions has already been
accounted for; that is, it has been duplicated and that duplicate has been marked with an R. Here's how to deal with
this situation.

Step-by-Step: Run a QuickReport of the Account

1. Set the Transaction Date to All Dates.

2. In the Status section set Cleared to Reconciled.

3. In the Match section type adjust in the memo field.

4. Click Run Report.

This QuickReport shows transactions that say Adjust or Adjustments in the Memo column and have a letter R in the
Clr column. If there are any transactions in this report, they can be considered possible culprits. Adjustments are
made because previous reconciliations did not balance. When the adjustment is put in, it is taking the place of an
actual transaction that was either missing or duplicated.

If the adjustments add up to the amount of the outstanding historical transactions, you can delete the adjustments
and manually reconcile the historical transactions in the register. To reconcile a transaction manually, make sure
you’re on the correct row and click the column with the checkmark until the R shows then click Save.

If there are no adjustments and these historical transactions showing as unreconciled in QuickBooks Online did
actually clear the bank account, then perhaps they were entered twice — with one being reconciled and the other
not. Use the search tool in QuickBooks Online to search for each transaction to find whether a duplicate exists. If you
locate the duplicate transaction you will need to determine which one is correct and delete the other. If you delete the
reconciled transaction, you will need to mark the other manually as R for reconciled in the register to keep the
opening balance accurate. Once the historical transactions have all been resolved and the report is correctly
reflecting the opening balance, you should be able to continue your reconciliation.

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Cleared Transactions

What if your opening and ending balances are correct but the reconciliation still doesn't match? If the beginning and
ending balances match the bank statement and the reconciliation difference does not equal zero then the error lies in
the transactions that have been checkmarked. Double-check all of the open and cleared items.

On the bank statement, compare the total payments amount and the total deposits amount to the totals listed in
the Reconcile window; this will help further identify if the incorrect transactions are deposits or payments

Double-check all transaction amounts to make sure they are checkmarked correctly (remember you can sort the
reconciliation detail grids by column headers to help find information)

Uncheck the checkbox on the Reconcile screen to hide transactions after the statement’s end date. Look for
current and future-dated transactions that are checked as cleared because they did clear the bank and were
marked as cleared by the bank feed but they cleared after the current statement’s end date. You may have to
uncheck them, which means with next month’s reconciliation you may have to re-check them manually.

You may have overlooked your interest earned or bank fees; if so, enter them in QuickBooks Online

One or more transactions on your statement are missing altogether from QuickBooks Online. In this case, add
any missing transactions to the register so they will show up on the reconcile list.

Check to see if the difference is a factor of nine. If it is, someone may have transposed some numbers on one of
the transactions. For example, if the amount was really $220.00 but they entered $202.00, the amount of your
difference would be $18.00, which is a factor of nine.

If you can’t find errors or omissions in QuickBooks Online records, the problem may be the result of a bank error.
To determine this, you’ll need to check your hard-copy documentation. If it turns out to be a bank error, record
an adjusting transaction for the difference between what the statement says and what the transaction should be.
Then contact the bank to report the error. When you receive the next bank or credit card statement, verify that it
contains an adjustment for the error, then find and delete the adjustment transaction that you made.

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Report of Voided Checks

As you learned in basic certification, you can use your Accountant toolbox menu when you access the QuickBooks
Online company from QuickBooks Online Accountant in order to use the Voided/Deleted Transactions view of the
Audit Log.

To create a report of voided checks, either the Void button has to have been used to void the checks or Void or
Voided must be entered in the Memo field at the bottom of the check.

Step-by-Step: Create a Voided Checks Report

1. Locate the Transaction List by Date report.

2. Click Customize.

3. Enter your date range in the From and To boxes, or select a date range from the Transaction Date
drop-down list.

4. In the Lists section, click the down arrow next to Transaction Type.

a. Scroll up to the top of the list and click Select Multiple.

b. Using Select from List, add each transaction type you use for checks. Note that Ctrl+Click will allow you
to select several.

5. In the left column click Match.

6. In the Memo field type Void.

7. Click Run Report.

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Missing Checks

QuickBooks Online does not have a missing checks report, which would allow users to list all checks, sorted by
check number, so they may scan for missing or duplicate check numbers. The solution is to customize the
QuickReport for the bank account and sort by check number.

Step-by-Step: Create a Missing Checks Report

1. Locate the Transaction List by Date report.

2. Click Customize.

3. In the General section, select All Dates for the Transaction Date.

4. In the Sort By section, select Num.

5. In the Lists section, click the drop-down arrow next to Transaction Type.

a. Scroll up to the top of the list and click Select Multiple.

b. Using Select from List, add each transaction type that you use for checks.

6. In the Lists section, select the bank account for Account, select the correct bank account.

7. Click OK then click Run Report.

8. You may want to memorize this report for future use. Remember this puts the transactions in numerical order by
first digit in the reference number, so you will see 1, 10, 100+ before 2, 20, 200+.

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Guide Conclusion
You have just completed Module 4, Reporting & Troubleshooting. This Supplemental Guide, in tandem with its
recorded module, has been provided to help prepare you for the QuickBooks Online Advanced Certification Exam.
Continue on to the remaining modules and their related guides and then proceed to the certification exam.

By completing this fourth module of the training course for Advanced Certification in QuickBooks Online, you should
be able to:

Recognize the available options to customize reports

Identify the fundamental logic behind QuickBooks Online reports

Indicate customized reports that are used in various business scenarios

Identify the steps to analyze the health of a QuickBooks Online company

Indicate the recommended troubleshooting solutions for banking and reconciliation

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