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crshovrd
February 25, 2024
Question

Classifying bank deposits as royalty income

  • February 25, 2024
  • 1 reply
  • 0 views

Hi,

 

Scenario:

I am a musician and I use 3rd party services to collect royalties on my behalf. I then request these royalties to be distributed to me at specific times. They go into my bank account as a regular deposit. At the end of the year I get a 1099 from these 3rd party services.

 

I need to generate a P&L and ensure that these royalties are tracked as income in QBO. I started to create each service as a customer and then tag them as royalties. I stopped because I wasn't sure this was the correct direction.

 

My questions:

  • What is the best way to track bank deposits as royalty income to generate an accurate P&L. 
  • How do I create a rule around these so that I don't have to do them manually?
  • Why is QBO only seeing bank transactions from 10/23 to now (2/24) and not all of them? If my bank and QBO are connected, wouldn't QBO have all records regardless of how much data the bank is sending? It seems like a major oversite that QBO only shows whatever data the bank is currently sending.

 

Thanks in advance.

1 reply

K
Kurt_M
February 25, 2024

It's a pleasure to have you here today, @crshovrd.

 

Before anything else, we commend you for providing details about your current situation inside QuickBooks Online (QBO). Regarding tracking bank deposits as royalty income, know that it's best to reach out to an accountant so they can guide you on the best way to track the royalty income inside the program. If you don't have an accountant, I can help you find one. Feel free to visit this page to find an accountant for your business: Find a QuickBooks ProAdvisor.

 

Also, it's a great way to utilize bank rules to help you manage bank transactions. This way, you won't have to categorize bank transactions and have them automated inside your company file. We'll gladly write down the steps to help you create your own set of bank rules:

 

  1. Access your QuickBooks Online company.
  2. Go to Settings then select Rules.
  3. Select New rule and enter a name in the What do you want to call this rule? field.
  4. From the Apply this to transactions that are ▼ dropdown, select Money in or Money out.
  5. From the in ▼ dropdown, select a bank or credit card account, or select All bank accounts.
  6. Set the rule conditions. You can set a single rule with up to 5 conditions. Set and include the following, then select + Add a condition.
  7. In the Conditions fields, specify whether the rule applies to Description, Bank text, or Amount. Then select Contains, Doesn't contain, or Is exactly to decide how QuickBooks applies the rules.
  8. Select the settings for the rule. Select the Transaction type, Category, Tags, and the Payee to apply.
  9. Select Save. (Optional) To reorder your bank rules priority, select reorder  and drag the rule to your desired order. The rule with the highest priority will always be applied first.

 

For more details, you can visit this article: Set up bank rules to categorize online banking transactions in QuickBooks Online.

 

About bank transactions, please know that the program depends on what your bank provides. Some banks allow QBO to download transactions within 90 days or more, and it could be why you only see transactions from a specific period and not all of them. To get through this, you can visit this page for more details: What to do if you can’t find downloaded transactions in QuickBooks Online.

 

On the other hand, here are some articles to help you reconcile an account and keep track every transaction you have inside QBO:

 

 

Feel free to comment below if you need assistance managing bank transactions or recording transactions inside QuickBooks. We'll make sure to be around to help you out again. Keep safe.

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