Automatic Downloads of Data: Is It Possible?

Ask the Accountant…

Question: Is there anything I need to do if I have my bank and credit card data automatically downloaded into QuickBooks? Does all the information just get recorded?

Answer: That sounds lovely, but it does not work that way, unfortunately. It is just a big dump of information into your QuickBooks, and you have to sort through it to put everything into its proper place. If the charges are not related to an order, it becomes fairly simple. A SAGE charge, for instance, can be mapped into a Dues and Subscription account, and QB will remember that the next time it sees it. Even if QB suggests an account, it does not mean it is correct. I have seen some egregiously incorrect QB suggestions that can create problems in your financial statements if you accept the suggested account.

The complications come with the deposits and payments related to our orders. You will have Supplier Purchase Orders in QB against which you need to record the payments. Distributors have varying processes, so the PO related to a charge may or may not be in QB when the payment is downloaded in this continuous data dump. This is especially true if it is a prepay to a supplier which is so common these days. QB or you will have a tendency to record it against Cost of Goods Sold. It will get there eventually, but with Purchase Orders, you will generate a bill that will go into Accounts Payable. When you record the payment of the bill, it will go into Cost of Goods Sold (COGS) because the Items on the PO are mapped into COGS. You will have a double counting of that payment.

Similarly, if you have been paid by a Customer, you may or may not have the Invoice in QB yet. In that case, QB will not be able to apply the payment against an invoice and will put it into Sales. You, again, will have double counting.

If—and until—you get a complete handle on your processes and the timing issues with automatic download of data, I suggest you record your data manually—receiving payments against Invoices and record Bills against Purchase Orders. You will have a much better handle of what’s coming in and out and avoid double entries.

While automatic download of data seems like a simple, easy way, time-saving way to get information into QB, it can often create as much if not more work.

Harriet Gatter is a QuickBooks ProAdvisor, a former accounting professor and a former ad specialty distributor of 23 years. She advises ad specialty distributors about using QuickBooks Premier & Enterprise, and SAGE Online to save time, eliminate errors, and correctly account for your business. Her specialty is converting distributors from ProfitMaker, SmartBooks, OrderMaster, AIA, and other accounting systems.

HGatter@AccountingSupportLLC.com www.AccountingSupportLLC.com

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