The first step in linking QuickBooks to your bank accounts is to apply for online banking services with your financial institution. If you use more than one bank, you have to apply to each one separately. If you’ve already started the application ball rolling, you can skip this section. If you haven’t, QuickBooks helps you apply for the services your bank offers.

Choose Banking → Online Banking → Participating Financial Institutions. Peruse the Financial Institution Directory to find your bank and apply for its online services, as shown in Figure 22-2. In the Online Financial Services section, click one of the four buttons to limit the list to institutions providing that service. QuickBooks automatically selects “Any services,” so you see every financial institution that the program works with. Scroll through the directory to find your financial institution. If your financial institution doesn’t off the online services you want, check out Intuit’s online banking services, described in the box below.

Figure 22-2. When you click the link for your bank, you’ll see its phone number and email address, the online banking services it provides, how to connect, and any special sign-up offers it has, such as a 30-day trial. An Apply Now button appears if the bank gives you the option of an online application.

When your financial institution processes your application and sends you a confirmation and a PIN (personal identification number) or password, check that the information you received is correct, like the account number. Now you’re ready to set up your account for online services.

When you receive a letter from your bank confirming that your online services are ready to go, you have your customer ID and your password (or PIN). Now all you have to do is set your corresponding account in QuickBooks to use these online services. The Online Banking Setup Interview wizard walks you through the steps:

The Online Banking Center introduced in QuickBooks 2009 had some glitches. Intuit fixed them in QuickBooks 2010, but to be on the safe side, Intuit lets you choose between the 2010- and 2008-style versions of the Online Banking Center.

Here’s what each Online Banking Center Mode does:

If your bank communicates via WebConnect, your first steps are the same as the ones for a direct connection. In the Online Banking Center, you choose the financial institution to connect to, and then click Send/Receive Transactions (or Send/Receive for register mode). A browser window opens and displays your bank’s website; use your customer ID and PIN or password to log in. On the website, click the “Download to QuickBooks” button (or one that creates a file of your transactions). Then, you can import that file (Choose Banking → Online Banking → Import Web Connect File) to load the recent transactions into your company file.

Banks that work with direct connections can do more than those using WebConnect. Depending on which services your bank provides, you can do some or all of these tasks online:

You don’t have to take any action to receive transactions from your accounts. QuickBooks automatically sets up a request for cleared transactions from your bank accounts every time you open the Online Banking Center. This section describes the steps in QuickBooks to set up electronic bill payments, messages you want to send to your bank, and online transfers between accounts.

Every time you go online, QuickBooks automatically requests newly cleared transactions from your financial institution. If you’ve set up items to send to your bank, going online pushes those along, too. Here’s what you do to send requests and receive replies in Side-by-side mode:

Every time you connect to your financial institution (see Online Banking Using Side-by-side Mode), QuickBooks downloads all the transactions that cleared since the last time you went online. This section describes how you match downloaded transactions using Side-by-side mode.

After you connect, the Items Received section displays information about the transactions QuickBooks retrieved, as shown in Figure 22-5. You’ll see the number of items received and your current online balances. Here’s how you process the items that QuickBooks received:

If QuickBooks matches every transaction, your work is done. If you open the account register (Opening a Register Window) in the Cleared column, you’ll see a lightning bolt for every matched transaction. If you’re not so lucky, read the next section.

Figure 22-6. When you click a Show link, QuickBooks displays that type of transaction in the Downloaded Transactions list and changes the link to Hide, as shown here. To display only unmatched transactions, click the Hide link to the right of the Matched line and the New line.

Unsuccessful attempts to match transactions can happen for several reasons, but the source of the problem is almost always a mistake or omission in your QuickBooks account register. If you forgot to record a transaction in QuickBooks before you downloaded transactions, this section tells you how to make everything match up. The box on Sending and Receiving describes other problems you might see and the steps to take to correct them.

If you write only a few checks and receive a few payments each month, matching each one individually isn’t too painful. But you have better things to do than match hundreds of transactions one by one. As long as you don’t need to match downloaded transactions to open transactions in QuickBooks or do anything fancy like create splits, you can add multiple transactions with the Add Multiple Transactions dialog box.

In the Add Transactions To QuickBooks window, click Add Multiple. The Add Multiple Transactions to QuickBooks (Figure 22-9) opens and shows renamed, unmatched, and matched transactions. See the box on Online Banking Using Register Mode for the scoop on renaming rules.

To add unmatched transactions to QuickBooks, you just fill in the Payee and Account cells (they have a white background to indicate that they’re editable) and turn on the transaction checkboxes.

When you’re ready to add the transactions to QuickBooks and you’ve turned on all their checkboxes, click Add Selected.

Figure 22-9. QuickBooks automatically turns on the checkboxes for renamed and matched transactions because they’re ready to add to QuickBooks. To turn on all the unmatched checkboxes, just turn on the Unmatched checkbox above the right end of the Renamed/Unmatched table. If you want to turn off all the transaction checkboxes, just turn off the appropriate “Select all” checkbox.

Say you’ve reconciled your credit card account to your statement. You go online and download transactions only to find that you’ve downloaded transactions you’ve already reconciled. You don’t have to match the downloaded transactions because your account is already matched up with your bank’s records, so you want to delete the downloaded transactions. In the Downloaded Transactions list, click Select Items To Delete; the Select Items To Delete dialog box opens. Here’s how you can select transactions to delete:

When the transaction checkboxes are turned on, click Delete Selected.

In Register mode, choose Banking → Online Banking → Online Banking Center to begin connecting to your financial institution. The Register mode Online Banking Center window is more compact than its Side-by-side sibling, as you can see in Figure 22-10.

After you send your requests, the Online Transmission Summary dialog box tells you how many transactions downloaded from your bank. Click Close. The Items Received From Financial Institution box shows the balances for your online accounts and any messages that your bank sent you.

In the Online Banking Center window (choose Banking → Online Banking → Online Banking Center), you can make changes to items to send before you go online. After you receive items from your bank, you can view them or delete them. Here’s how you use the buttons in the Online Banking Center window:

Every time you connect to your financial institution (by clicking Send/Receive in the Online Banking Center window), QuickBooks requests a statement of all the transactions that cleared since the last time you went online. After you connect, in the Items Received From Financial Institution box, you’ll see an entry for the statement QuickBooks retrieved. To view the downloaded transactions and pull them into your company file bank account, select the entry and then click View.

QuickBooks opens the Match Transactions dialog box and tries to match the downloaded transactions to the ones you already entered in QuickBooks. If QuickBooks automatically matches transactions, the Results of Automatic Transaction Matching dialog box tells you how many. Click OK to close the dialog box. At the bottom of the Match Transactions window on the Downloaded transactions tab, the status for those transactions is set to Matched and you don’t have to do anything to them. QuickBooks automatically marks them as cleared in the register. Transactions that the program can’t match have a status of Unmatched, as you can see in Figure 22-11. The next section tells you how to handle unmatched transactions

Figure 22-11. If you dutifully enter all your transactions before you download, dozens of unmatched transactions might make you nervous. You must first turn on the Show Register checkbox (below the Match Transactions toolbar) for QuickBooks to compare the downloaded transactions to the ones in your account register.

If QuickBooks matches every transaction, your work is done. In the account register in the Cleared column, you’ll see a lightning bolt for every matched transaction. If you’re not so lucky, keep reading.

If you have several unmatched transactions that you want to add to the register, click Add Multiple. The Add Multiple Transactions to QuickBooks opens and lists all the unmatched transactions. As you can see in Figure 22-12, the top half of the dialog box lists transactions that are either ready to go or are missing an account. After you choose accounts for the transactions that don’t have them, click Record.

Figure 22-12. In this window, you can’t do anything for the transactions at the bottom of the window with unrecognized payees. To correct those, close the Add Multiple Transactions to the Register window. In the Match Transactions window, select each one individually and then click “Add One to Register”. You can edit the payee name in the register.

Register mode has no way to delete transactions on the Downloaded Transactions tab. If you already reconciled your account and then downloaded the transactions, you might think you have to live with those unmatched transactions forever. With some fancy, though tedious footwork, though, you can get rid of those downloaded orphans. Here’s what you do:

Scroll in the register to find the reconciled transaction that pairs with an unmatched transaction. Click its Cleared cell until the cell is blank. An Asterisk in the cleared cell means the transaction is cleared; a checkmark indicates that it’s reconciled.

As soon as the Cleared cell is blank, QuickBooks automatically matches the register transaction and the downloaded transaction. You’ll see a lightning bolt in the Cleared cell to indicate the match. The downloaded transaction disappears from the Downloaded Transaction tab.

Now, click the Cleared cell again until you see a checkmark. The register transaction is back to being reconciled and the downloaded transaction is gone forever.