The bank auto feeds section in QuickBooks Online, which is accessible by hovering over the “Banking” tab on the left side and clicking on “Banking”, is a convenient perk function that allows the ability to directly connect your bookkeeping software to the transactional activity that occurs in your financial institutions, such as your bank and credit card accounts.
However, through my experience, this function is merely a convenience and not a necessity to maintain your bookkeeping.
Here are my lists of pros and cons of using QuickBooks Online Bank Auto-Feeds:
- Convenient – Once connected, financial transactions can be easily imported into a type of holding account, waiting on the user to click and grant permissions to book these transactions into your financial registers (accounts).
- Fast – You don’t need to login to a bank account to grab transactions to enter in to your bookkeeping system, instead the transactions come to you.
- Efficient – One can easily review the bank-fed downloaded transactions list and, already, QuickBooks Online may have suggestions, especially based on your history, as to where to book the new transactions to. Then you just click a button to consummate the booking.
- Accounts Receivables – It is still the safest practice to manually apply customer payments to open invoices and then book the deposit entry (either sole or batched) yourself. Ignore the corresponding bank feed here.
- Accounts Payables – It is still the safest practice to manually apply your own payments to open vendor bills yourself and completely ignore the corresponding bank feed here.
- Speed – It is often tempting to go too fast when resolving bank-fed transactions into obvious places in your chart of accounts, leaving the door wide open for mistakes that may not be caught until months down the road.