Downloading Your Way to Disaster in QuickBooks

Now I know one reason why so many people run into trouble when using QuickBooks.

I was recently working with a client that had asked for some help getting data imported from PayPal and from her bank account into her QuickBooks file.

So we connected remotely and began to review her setup. As I always do in cases like this, we made a backup of the QuickBooks data before we did anything else- always a good habit to get into (just in case of course).

Then, we began to import the data from her bank. A couple of clicks on the data file she downloaded from her bank and the screen was telling us the import was successful.

WRONG!

One look at the results of the download indicated that all was not well. Not well at all.

The file she imported proceeded to create several new bank accounts in her QuickBooks chart of accounts - and it didn't bother to post anything to her main bank account.

To put it simply, this download process did nothing but screw up her QuickBooks. I was shocked at just how much of a mess it made in such a short time. Off to the trash with using that idea.

AVOID GIVING YOURSELF THIS HEADACHE

At that stage, we restored her QuickBooks backup, and then began the import of the PayPal data.

As before, the import itself went just fine - from a technology perspective.

From an accounting perspective, it was a disaster!

When the import was done, she now had 2 new bank accounts in QuickBooks in addition to her PayPal account. It added a PayPal income account and a PayPal expense account. Note that I said all of these were set up as QuickBooks BANK accounts that would show up on her balance sheet report, NOT the profit and loss report which is where they belonged.

Ugh...

We made a couple of quick tweaks to get this imported data corrected, and she was going to do another download from PayPal to see how that turned out. We're keeping our fingers crossed she can at least use that successfully, but I am doubtful. Hope I'm wrong!

MORALS OF THIS STORY

• If you are NOT well versed in accounting or QuickBooks, how will you know if the data you download from your bank or PayPal is posting properly? Just because they say it imports doesn't mean it imports correctly.
• Walk first- then run. It is critical to first get a solid understanding of how QuickBooks works via some manual entries of the data you plan on electronically importing later. Otherwise, the download process will only put garbage into your QuickBooks data file a whole lot faster!
• There are many banks that can and do provide a great download/import service.When it is used correctly, the download can be a big time-saver. When it is used incorrectly, it can be a disaster.

RELATED POST: QuickBooks Should Come with a Warning Label!

Do you have a QuickBooks download story to share? Post your story below - we're interested to hear about your experience!

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Scott Gregory is a specialist with QuickBooks Pro, Premier and Enterprise accounting software. He has been helping businesses "think beyond the ledger" for over 25 years.

Comments

[CPAJeff]

Consider me a stick in the mud on this issue. I never recommend this to my clients. "QB is easy - I just download from my bank and you'll have everything" may be the most terrifying 13 (!) words an accountant can ever hear. There is a reason we do bank reconciliations. Banks make mistakes! Not very many, but it does happen! Also, even if the download is technically correct and hits the right bank account - what are the odds of the expense codes being correct? This is a shortcut in the same way that those electrical gadgets you stick to your abs while you sit on the couch and eat ice cream works.

Rant over.

[VelazquezTRACI29]

Do you understand that it is the best time to get the home loans, which would make you dreams real.

[Caitlin at Buy Backlinks]

Oh my! Doing a backup is a really good habit. Isn't this a bug that QuickBooks should fix? Have you reported this to their team for repair?

[Seth David]

It sounds like this was the ".iif" format. The ".QBO" format shouldn't do this. When you go to import the ".QBO" format you will be prompted to tell QuickBooks which bank account to import to, or if you need to create a new one. Your bank should show you which format you are getting before you download. The ".QBO" format will usually be described as something like "QuickBooks Web Connect (2004 and newer)."

Even if you don't sign up for web connect with your bank, you can generally download the QBO format, save it to your computer and then import it by choosing 'File->Utilities->Import->Web Connect Files

[Kara Haas]

Well said. This is generally why I have an aversion to the Online Banking Module. Most that I have seen look like this and make me cringe. I am starting to get on board using the "Walk first - then run." approach.

[Submit a Promo Code]

I agree that that is the reason of crashing matters when using Quickbooks. Thanks for shedding light on this matter.

[Shannon Tucker]

This is an unexpected problem people run into -- they assume that if there are no errors, everything's fine! I've talked with a number of people who have experienced this. So thanks for the heads up.