Welcome to Lesson five, automating your accounting using the rule feature. In the last lesson, you learned how to manually record transactions in QuickBooks self employed. In this lesson, you're going to learn how to set your transactions up. So they can automatically be recorded in QuickBooks self employed without you lifting a finger. So for those of you that don't have the time to sit there and manually record transactions, either because you would prefer to spend your time working on what you do best, or you simply can't stand doing it. Pay attention to this lesson, because you're going to fall in love.

Now before I show you how to automate your accounting and QuickBooks, I do want to mention that I highly recommend that every like every now and then you still go back and review You've entries that were automatically recorded to make sure things are where they should be. Now that that's out the way, let's see how the magic happens. Now back rules I lifesaver for those individuals who absolutely can't stand the arduous process of doing their own bookkeeping. So QuickBooks self employed has come up with a system where this process can be automated to a certain degree. Now, when you create a rule in QuickBooks self employed, or either when you create a rule, QuickBooks self employed remembers the rule and applies that rule to all future transactions. You can also apply that same rule to past transactions.

If you check a certain box. Select see how this system works or rather how the rules feature works. So let's get Use an example here using the common ground cafe. So let's assume that this is a business expense. And that every other week, you take either your employees or you take a particular client out to breakfast or lunch at this particular restaurant. So you know that every week or every two weeks or however often you're going to get a transaction coming in from common ground cafe.

And this trip, this could this transaction stays consistent as it relates to the type of expense that it is. In this case, it's going to be a business and entertainment expense because it's lunch that you breakfast that you purchase for either an employee or for a business, a business or for someone that you do business with. Okay, so here's how this works. So first of all, we're going to categorize the common ground cafe and put it into the correct category, which you misclick case is going to be meals and entertainment. We're going to click on business. And it went straight to meal to entertainment.

So we don't have we don't have to do anything with that. Now we want to add a rule for this, we want you want to tell the system that every time something comes in from common ground, here's what I want you to do with it. So to do that, you click on Add rule. Okay? When you click on Add rule, you're going to see under this under description, the common ground cafe. So, you see this checkbox right here?

This checkbox is asking you the question. When this transaction comes in, do you want it only do you want do you want the rule to only apply if it says common grounds cafe, exactly as you said, nothing else. No other words no other string of words in the description. So if you check this box, then That's exactly what's going to happen. The only time that the rule is going to apply would be if Common Ground cafe comes in, just like that, in those exact same words, in this exact same formation. Now, if you know that one month, or in one week, Common Ground cafe comes in, as you see it on the screen now, and then sometimes it comes in with other texts before it or other texts after it, then I will suggest that you do not click this box.

So what's going to happen is whatever variation shows up inside of your feed, the rules is going to apply as long as it still has Common Ground cafe in it. And let me give you an example. I don't think you can read what's on the screen in that little black box, but I'm going to read it to you just in case you can't see it. It says use this to exactly match a string have characters without any extra text for example, coffee spots. So if something says coffee spot, the only time that rule applies is when it says copyist coffee spot. Now it says leave unchecked for partial matches that contain the string, coffee spot.

For example, it might say coffee spots Northwest or it may say SF coffee spots. Okay, so, no matter what comes before or after coffee spot if you leave this box unchecked to create rule is the rule rather is going to apply to the text. Now keep in mind that this is not it is not case sensitive. So whether whether it comes in all capital letters or small letters or combination of the two that doesn't matter Rule is still going to apply. So what do I suggest? Do you What don't you check the box?

Well, this is really going to be dependent upon how your transactions come in. So if you have a transaction that comes in, that also has maybe coffee grounds, or something to do with coffee ground cafe in it, but it happens not to be the restaurant, maybe it's something totally different, then I wouldn't check the box. But I wouldn't check the box because you want to make sure that whoever comes in wherever transaction comes in, that you are sending it to the correct account. So for this instance, we're going to go ahead and just check the box. So here we go. We've checked the box, the description is going to give a name, we've checked the box.

The second drop down is the accounts. So whatever account you have set up in QuickBooks self employed is going to appear under this on this under this particular option. So in this case, we only have bank accounts and credit card accounts attached to QuickBooks self employed. That's all you see here. And what this is really saying is when this transaction, Common Ground cafe comes in, only only applies a rule, if it's coming from chase account, or only apply the rule, if it's coming from chase credit card, my suggestion would be to not select either one because you don't know if you're going to use a credit card for your lunch date, or if you're going to use a debit card. If you use a debit card, it's going to come from your checking account.

Of course, if you use a credit card, which is actually going to show up from your, it's going to show up via your credit card transactions. So I think it's best to leave this unchecked. So that way, you don't wind up missing the transaction if you use a different form of payments, compared to the option that you picked, rather the account that you've picked to apply to the rule. The third thing is the type. Okay, so what type of expense is this? If it's a business if in this case we we said this is a constant business expense, it's going to be a business expense.

Every single time it comes in, it's going to be business. So therefore, which we pet we leave it as business. And the category relates to what accounts is this transaction going to be applied to. As we said earlier, it's going to be meals and entertainment, so that stays the same. Of course, if you had to change it, you just click on the meals and meals and entertainment, you'll pick the category that most reflects the transaction here. So you can either pick travel fees, whatever, well, you can click show all categories, and it's going to show you everything and you can pick the one that closely relates to this particular transaction.

But in this case, it's in the correct category under meals and entertainment. Okay, so let's get out of this by just clicking anywhere in the world. objects. Okay, so another thing that I do want to say is, let's say for example, this happens to be a personal type expense. And every time something comes in from common ground cafe, it happens to be personal. So then you're going to go back to the type, and you're going to click on personal.

So this means that every single time a transaction comes in from common ground cafe, it's going to automatically be sent to personal transactions. Another thing is, let's assume that this is a split transaction. So every time something comes in from common grounds cafe, it's normally a split between business and personal. So under those circumstances, you're going to click on split. Okay, so we have a common Common Ground cafe as a description. The type is going to be split and it's split between business and personal.

So the assumption is Whatever transaction that's coming in as a rule, let's say, you know, and usually in order to use a split, it has to be constant, which means that every single time this transaction comes in the split is always 5050 is always 7030 is always 6040. If the split is not always constant and consistent, and I highly suggest that you do not create a rule for that type of transaction, but if it is, then here's how you would handle that. Under business, you would say okay, so normally, whenever something comes in from common ground, it's normally only 40% business. You're going to click you're going to I'm typing 40 and as you can see, personal automatically went to 60. So this is how it's going to be split whenever anything comes From Common Ground cafe, because it's going to be split between business and split between personal.

Now you can even further split this. So let's add another line, we add another line. Normally it gives you additional business lines. So let's say you have an item that comes in for $100 from any type of provider, so it's $100. And this is another split, that stays consistent throughout the month whenever it comes in, it never changes. So you have 100 that stays at the at the total amount is $150 $150 comes in, and is always split three ways.

So let's say let's assume that 10% of a particular let's say 20% of a particular transaction, goes to meals and entertainment. And then let's say, let's say 30% goes to a different type of transaction, and then that leaves 50%. That's going into your personal account. So of course, let's say this is office supplies and don't mind the common ground cafe, I'm just trying to give you an example of how you can split a transaction three ways rather than two ways. So we're under the assumption that we're dealing with an office supply that that you charge or rather that you spend on every single month, but part of that 50% of that particular purchase is a personal purchase. So then we will go here and change the meals and entertainment and let's pick show all transactions.

So it's an office supply. Let's see what can we pick here? See, that's the office supplies postage. So 20% of that goes to office supplies, postage, and then the other 30%. Let's say it goes to printing. Okay, so we can just type in printing here, find the quicker that goes to printing.

Voila. So there you have it. So now we have taken a single transaction, and we split it three ways. It goes to two separate business accounts. One is office supplies, and one is printing. And then And then the third account it goes to is personal.

So this is how you split a transaction into three different ways. Now one other thing, when you're creating a rule, let's say you've created this rule, and you want to apply it to past transactions, now applying it to past transaction transactions currently Speak I'm sorry, applying it to past transactions can mean a few things. But the example I'm going to give you today, let's say that you are creating rules in the month of October. And you just so happen to want to create a particular rule, because a transaction came in today, and you want to go ahead and create the rule for this particular transaction. And let's assume that you have the same transactions that occurred earlier in the month or in a prior month as they had it occurred in September or even in August. You haven't yet inputted the transactions into the system.

So you can click on this box that says also apply to past transactions. And then what happens is automatically all the transactions that occurred prior to the date that you created this rule. The transactions are going to go back and the system is going to look back, it's going to look back into the days prior to the day you create the distance action. The month prior. And if it finds the description, common grounds cafe anywhere, is going to also apply the rule to common grounds cafe. Now, let me show you an example of this.

So we've created this rule. So we're going to save it and then now I'm going to go back to other common ground cafes. And you're going to see how because I, I checked the box that says creates the past transactions, you're going to see how this affected all the transactions from common ground cafe occurred prior to October. Okay, so what we did we used I don't remember which one was probably either the 12th I think, yeah, the 12th. We used October 12 transaction to create these things. To create this rule to remember we split it personal, a certain percentage, and then business a certain percentage.

Now let's go further down to see if this particular transaction, Common Ground cafe existed in a prior months. So we're going down the line looking for common ground cafe. And okay, here it is. Okay, so in July in May of 2017, we also had a transaction from common ground cafe. So remember how I told you it's going to look back, and it's going to split the transaction the exact same way that it did based on the rule that you created. So as you can see, we have the two business splits and we have the personal split, they look back and if the most recent transaction that it found prior to October was in May, so let me see if there any other transactions for common ground.

I'm not sure if there are doesn't look like they are but but you see how that gives you an idea of how checking that box works and what it does, when you actually check that box. So as you can see, when you create rules, whenever whenever a transaction comes in from any of the accounts that are attached to QuickBooks, QuickBooks self employed, everything automatically goes to the correct category. So therefore, you don't have to do any of the work. Now, like I said earlier, though, I always advise my clients that even though you use the rule system, you still want to go back and make sure that things went where they were supposed to go, Jimmy, just in case there was a glitch in the system. You want to make sure that a transaction that was supposed to have gone to meals and entertainment, didn't go into office supplies, because then you know, that's it, it's very important, because for tax purposes, you want to be certain that things are being properly deducted in the rights categories.

So other than that, You can see how simple it is to set up rules with QuickBooks self employed, and how setting up these rules can save you time. It can save you aggravation. And for those of you that really don't like, you know, bookkeeping, which, as far as I know, most small businesses who are in business, something other than bookkeeping, don't like a bookkeeping, but you see how it can, it can make things so much more easier for you. So in this lesson, we learned how to automate our accounting system using the rules feature, and how doing so can help save us time and aggravation. We also learned the importance of periodically checking to make sure all automated transactions went into the right accounts. In the next lesson, we're going to learn how to track auto mileage