Now that you've connected your bank and credit card accounts, you'll see a steady stream of transactions flowing into QuickBooks. The next critical step is to correctly manage and categorize this information. Proper transaction management is the foundation of accurate financial reporting, giving you a clear and reliable view of your business's health.

For every transaction, best practice is to attach supporting documentation. This could be a receipt, a bill from a vendor, or a contract. Why is this so important?

QuickBooks Online has a built-in feature to attach files directly to any transaction. Make it a habit to snap a picture of your receipts and upload them right away.

This is one of the most important rules in QuickBooks: Always match, don't just add.

When you receive a payment from a customer for an invoice you've already sent, QuickBooks will often suggest a "match." Similarly, when you pay a bill you've entered, it will find a match. Accepting this match is crucial because it closes out the open invoice or bill.

If you mistakenly add the transaction instead of matching it, you'll create a duplicate. For example, you would be recording the income twice (once from the invoice and again from the bank deposit), which inflates your sales and profit numbers.

What about transactions that don't have a corresponding invoice or bill, like buying gas or office supplies? Even for these simple expenses, you must associate the transaction with a customer or vendor.

Resist the urge to just categorize the expense as "Fuel" and move on. By assigning "Shell" or "Wawa" as the vendor, you unlock powerful reporting capabilities. At the end of the year, you can easily run a report to see exactly how much you spent with each vendor. This data is invaluable for budgeting, negotiating better prices, and understanding where your money is truly going.