Bookkeeping Software Issues: What To Do When Bank Transactions Are Off

Bookkeeping

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Technology is amazing until it isn’t. The Roomba that spreads dog poop all over the house. The cell phone that pocket dials your ex. The autocorrect that makes your convo with your mother-in-law super awkward. But on the whole, technology has improved our lives immensely.

When it comes to your business, the technology options are endless. Email service providers, funnels, ads, schedulers, bookkeeping software...all tech options to make our lives more convenient. So how do you troubleshoot when something goes wrong? Here are a few things that can get off when you download your bank transactions into your bookkeeping software and how you can fix them.

Bank Transactions are being double counted

Ah, my Facebook ads for the month, that goes to advertising...but wait, didn’t I just categorize that one yesterday? Yep. Totally happens. Duplicating of transactions usually happens when a transaction is first brought into the software while your bank considers it to be pending, and then it gets brought in again after it clears.

How to identify duplicate transactions: download a list of all of the bank transactions from your software, if it’s obvious which ones are duplicates then you know which ones to delete. But I’ve seen where it’s not so obvious. The duplicate transactions can download into your software with totally different descriptions. Consider keeping the transaction that has the most descriptive or helpful data.

If it’s really difficult to figure out which to keep and which to delete then I recommend downloading the transactions from your bank or grabbing your bank statement. Compare the list from your software to the list from your bank to identify which transaction to keep and which to delete. At the end of the day the goal is to make sure your software matches the bank.

Bookkeeping Software Issues: What To Do When Your Bank Transactions Are Off

Bank Transactions are missing

Occasionally your bookkeeping software and your bank may lose connection. Password changes, going too long between downloading transactions, any number of things can cause missing data. Make sure you hop into your software weekly to confirm that your transactions are downloading properly. This has an added benefit in that you know exactly how your business is doing in real time, and I’m all about that.

Unfortunately, it can be difficult to catch missing data. The best way to catch it is to do your monthly bank account reconciliation. This is where you compare you month-end bank balance per your bank statement to the month end balance in your software. Most software makes this process super simple, so it’s practically painless. When it doesn’t agree you know that you’ve got some investigation to do.

How to identify the missing transactions: again the best method is to download the transactions from your bank and compare it to the transactions in your software. Once you figure out what’s missing you can manually add the item and categorize it as normal.

When Should I Reconcile Bank Accounts?

You know bookkeeping is vital to the success of your business. Stop procrastinating and start getting it done with this simple checklist. You’ll get:

  • A list of exactly what tasks you need to do each week, month, quarter, and year so you can stay on track.
  • Tax due date reminders so you stay on the IRS’s good side
  • All the satisfying checkboxes so you can finally mark bookkeeping off your to do list

Bank Transactions are downloading incorrectly

Technology can do some crazy things. I’ve seen a software bring cash spent and cash received transactions all as cash received. I probably can’t even list all of the ways transactions could be downloaded incorrectly.

How to identify the incorrect transactions: No surprise here, you’re going to have to compare your software transactions to the bank transactions and find the problem children. Make sure you’re looking for not only the correct amount but that the transaction is going the right direct (spent vs received). In some software, you won’t actually be able to edit the value of the transaction, in that case, your best option is to delete the transactions and upload the correct ones.

You've got transfers between accounts

This issue is a bit more of a user problem than a tech problem but it's still good to be aware of. Transfers between accounts (think between your checking account and PayPal) are often misclassified, leading to expenses being double counted. For instance, you paid $500 to a business coach using PayPal, within your PayPal connection in your software you categorize that $500 as Training and Education. That $500 actually pulled out of your checking account (using PayPal as the payment vehicle) so you've got a $500 transaction there as well. If you also classify that as Training and Education then you've doubled your expenses.

My best advice is to classify the expense at the point it makes contact with your vendor (so in this example PayPal) and to classify the movement of money into your PayPal account from Checking as a transfer. Don't feel bad if you've done this one, I see it all the time! This is where a good gut check of your P&L comes in handy. Check your numbers and determine if they make sense based on what you know about your business.


While several things can go wrong when you download transactions from your bank account to your bookkeeping software, overall the technology makes everything so much easier. And I’m on board for anything that makes the complicated world of entrepreneurship a little bit simpler.

Have no desire to sort out your own software issues? I can totally help. In the words of one of my favorite clients: “Every time I look at it, I want to cry. I'd rather be writing :)” And I’d rather be troubleshooting your bookkeeping issues! Send me an email and we can talk about all the ways we can work together to get your software woes figured out.

I’d rather be troubleshooting your bookkeeping issues!

About the author

Megan

I’m a bookkeeper for women who run a service-based business. They dread tracking their business expenses and want someone they can trust to take it off their hands. I get their books in order so they can focus on serving their clients.


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