One of the areas that needs improvement in QuickBooks is how they deal with online banking – importing transactions from your bank to add and reconcile your bank accounts with your QuickBooks file. With QuickBooks 2014, Intuit has made quite a few changes that is moving this in the right direction. Let’s take a look at the new QuickBooks 2014 Bank Feeds feature.
Note that this is not a tutorial on how to use the feature, I’m just giving you an overview of the changes.
Bank Feeds vs. Online Banking
Let’s get a one thing straight here – what do they mean by “bank feeds” and how is that different from “online banking”?
Intuit found that there was some confusion regarding terminology here. They’ve had “online banking” as a feature in QuickBooks for many years – as in, the ability to download transactions from your bank or credit card to see what transactions have cleared, match transactions from the bank with transactions in your QB file, add transactions that you haven’t entered in QuickBooks yet, and to see the current account balance.
If you ask a group of QuickBooks users if they use “online banking”, a good majority will probably say “yes”. However, if you look at how many people actually use the “online banking” feature in QuickBooks you’ll find that instead, only about 15% of QuickBooks desktop users actually use the feature that you find in your QuickBooks menu. That is because the term “online banking” is confusing, people that say that they are using this are also thinking about logging in to their bank accounts online (outside of QuickBooks) to view statements, make payments, pay bills, and more. Activities that aren’t limited just to what you do in QuickBooks.
So, Intuit decided to rename this feature to be “Bank Feeds”, to differentiate it from the more expansive definition of “online banking”. Instead of selecting Banking and then Online Banking as you do in QuickBooks 2013, now you will select Banking and then Bank Feeds in QuickBooks 2014.
Only 15% Use Bank Feeds?
Do you use the QuickBooks online banking or bank feeds feature? I’ll be honest – even though I’ve been using QuickBooks for my business accounting since 2005, and I immerse myself in the details of how to use QuickBooks every year, I haven’t been using this feature. And, I’m not alone. Why don’t people use the feature?
- Connectivity: How hard is it to initiate a connection to your account and is there an additional fee for that?
- Usability: Is the feature easy to use? Is the user interface easy to work with?
- Automation: How much of the chore of reconciling your online bank account with your QuickBooks file can be dealt with automatically so you don’t have to work through all the details?
Intuit’s research showed them that the Online Banking feature was far behind what is found in these other products. So, with QuickBooks 2014 Bank Feeds, they worked to improve the user experience in the QuickBooks desktop product in each of these three areas.
QuickBooks 2014 Bank Feeds
To use the new Bank Feeds feature you need to enable it in your Preferences.
In QuickBooks 2013 we had Side by Side Mode and Register Mode. Now we have Classic Mode, which is the same as the old Register Mode that has been around for years, and Express Mode. Is this just a renaming of “Side by Side” to “Express”? Well, not really. Express Mode is essentially the Side by Side Mode with an improved user interface and better “rules”. When you dig down, you’ll see the old side by side mode is still working underneath.
Let’s take a look at how Intuit is addressing each of these three areas with the QuickBooks 2014 Bank Feeds feature. Note that this is not a tutorial on every aspect of the new feature – for detailed help you’ll want to look at the upcoming book QuickBooks 2014 In Depth by Laura Madeira.
The first thing you have to do is to connect your QuickBooks accounts with your bank or credit card accounts.
In QuickBooks 2013 you had two ways to connect – Direct Connect and Web Connect.
Web Connect is usually free – you download a file from your bank website and then “open” that file to apply the records to your QuickBooks file. This is a time-consuming manual task that is inconvenient. Many banks offer this file, but not all.
Direct Connect is simpler – once you connect your online bank/card account to QuickBooks you can easily transfer the information without having to log in through a separate browser and manually download a file. The problem is that this usually is not free and some banks don’t offer this option.
Is this improved in QuickBooks 2014? Well, there are a few improvements, but at this time they aren’t all that significant. The setup process has been reorganized and leads you through the steps. I’m not showing all of the steps that you’ll take – the big difference here is that after you select your bank you’ll see this screen IF your bank offers a Direct Connect option.
So, has Intuit improved the Connectivity aspect of Bank Feeds? Looking at the R1 release, I would have to say “not a whole bunch”. It is much easier to get bank information in a product like Mint or Quicken than it is here.
HOWEVER, this is an area that Intuit is investing time in, and I expect that you’ll see some big changes here in the near future. We’ll have to see what they can do!
How easy is it to use Bank Feeds? This is an area where Intuit has made a lot of improvements.
Let’s start by looking at the “Side by Side” mode in QuickBooks 2013. First you open the Online Banking Center, where you see the summary information on your accounts.
If I want to work with one of the accounts, I click on it in the list in Items Received, and I see the list of transactions on the left. You have to click on an individual transaction to open the window on the right (which is a bit crowded) to be able to see the transaction detail on the right.
You also can click the Add Multiple button in the prior window to get a list of transactions to work with. This is a bit faster to work with when you have a lot of transactions, but you can’t easily do “splits” or other actions from this list.
Now let’s look at how this has changed in QuickBooks 2014. Here’s the Bank Feeds window, which uses fonts and colors in the standard fashion that we expect in the newer user interface. This is clean and easy to read – I particularly like the improvement in the bank account list on the left side.
Click on the Transaction List button and you see a list of all of the transactions that are waiting for you to look at. You can easily apply different actions to each transaction, you can click on the colored bar at the top to filter the list by different status types. This is an easier screen to work with than the older “side by side” screen, and because you have the “action” list on the right side it is easier to work with than the “add multiple transactions” list from before.
It is important to note that you haven’t lost any of the features of the “side by side” approach from before. The transactions list view is a layer added on top of the side by side feature, providing you with additional capabilities and an easy way to work with a lot of transactions quickly. If you select the Add More Details option from the Action list, you will see the underlying screen that is essentially the detail view of the old side by side approach.
This is another area where Intuit has been working on adding improvements. It is important that the Bank Feeds feature save you as much time as possible, and the best way to do this is for the program to automatically classify transactions for you. QuickBooks does this by creating “rules”. In addition to applying rules that you create, if the program can create new rules for you based on your actions, the speed of the system improves dramatically the more that you use it.
QuickBooks 2013 had very simple rules, just a way to search the downloaded name for certain values and then renaming the transaction to a particular vendor.
Here’s the rules feature in QuickBooks 2014. In addition to being able to classify the name, you can set the category for the rule as well. This is a big improvement. As you go through the transaction list and name/categorize transactions, QuickBooks will learn from your actions and will create rules of its own.
What Do I Think?
I remember the hullabaloo that people raised back when QuickBooks 2009 dropped the register mode and added the first iteration of side by side mode. It was one of the largest mass rejections of a new QuickBooks feature that I’ve ever seen. Intuit did fix the product, AND they restored the old register mode to satisfy people who wanted to use that method. So I get nervous when Intuit makes changes in this feature. Fortunately, this time I think that Intuit is on the right track and this is going to be a feature that I’ll want to use myself.
I talked about the three areas that Intuit focused on:
- Connectivity: This hasn’t improved dramatically in the R1 release. However, there should be some great improvements coming here as Intuit continues to develop the new Bank Feeds feature. They’ve shown us that they are working hard to update the entire feature, I expect that they’ll focus their attention in this area.
- Usability: Yes, they have greatly improved this aspect of the product. They have updated the user interface to make it fit the overall scheme, they have simplified the workflow, they have made it easier to accomplish your tasks in fewer steps.
- Automation: There are advances here as well. Renaming rules are greatly improved – but there is more that they can do. I also believe that they are going to work on improving this area of the program in upcoming releases.
As I’ve said all along, don’t use the R1 release if you can avoid it. There are a few problems that have shown up in my initial testing, as I would expect in an R1 release. I haven’t seen anything that damages my files or posts incorrectly, but there are a couple of places where the program crashed.
All in all, this is a great improvement and I’m expecting great things in upcoming updates.