Most QBO customers use accrual accounting. When transactions come through the bank feed for obligations that were incurred in prior periods, this creates extra manual work for bookkeepers to recognize the transaction in the correct (prior) period without disrupting the ability to reconcile the bank account in the current period. Our latest release eliminates that extra work.
For example, imagine that I am a homebuilder and take delivery of some lumber on December 20. The supplier gives me a month to pay, and I don’t actually pay the lumber supplier until after the holidays, on Jan 10. If you’re my accountant, and you’re doing things the right way, you won’t simply post the transaction when it comes through the bank feed, because that would recognize the expense this year, when it should have been recognized last year.
Instead, you’ll create a bill, backdate the bill to the date the obligation was actually incurred (Dec 20), create a bill payment, date the bill payment to the date that money changed hands (Jan 10), and then match the bill payment to the bank transaction.
We’ve just added a new feature to the bank feed that does all this for you. On any transaction, simply choose Create backdated bill or Create backdated invoice from the menu on the right. Choose the date on which the backdated transaction should be recognized. Add a category if you haven’t already, and then click post. That’s it!
✅ The bill/invoice will be created on the right date, ensuring your client’s records are compliant and are accurately reporting the period in which the obligation was incurred
✅ The payment will be created on the right date, ensuring the bank will still reconcile because the payment is captured in the right month
✅ The bill/invoice is marked as paid and correctly matched to the bank feed transaction
What used to take 10-20 extra clicks should now take only 2. The feature is available only in the new bank feed, so make sure to switch your clients over if they haven’t already.
Try it out, and let us know if you have any feedback!
