This account cannot be deleted or merged and is used to record assets that cannot be matched to an account. The balance of this account should always be zero. If there is a balance in this account, it is the result of adding a transaction in your bank feed, specifically a transfer to Uncategorized Asset, or mistakenly using this account in a journal entry. It is important to correct this to keep your books clean and your financial reports accurate.

QBO Bank Feeds Auto Create Transfers to Uncategorized Assets

When a payment to an unrecognized account is made in QuickBooks Online, the automatic rule creation feature in the bank feed can automatically categorize the transactions as a Transfer to Uncategorized Asset. This happens when you make a payment from a QBO connected account to an account that is not connected to QBO. Often, there is no vendor name referenced in the bank text, but there is a reference to a payment or transfer.

Correct Categorization Uncategorized Assets In the Bank Feed

If there is a transaction in your bank feed that is categorized as a Transfer to Uncategorized Asset you may need to change the category to an expense account as seen in the snapshot below. However, if the transaction truly was a transfer or payment to a bank or credit card account that is not connected to QBO, you will need to either transfer the payment to an Equity Account, if the transfer was made to a personal and not a business account, or add the account that is not connected to your Balance Sheet and make the transfer to this account.

Create ALL of your business bank and credit card accounts in QBO

While not all business bank and credit card accounts can be connected to QBO, they ALL should be created in QBO on your Balance Sheet. Regardless of whether these bank or credit card accounts are connected, you can import in transactions and make transfers to these accounts. Above, when I noted adding a Balance Sheet account this is what I meant. You create a new account for the business bank or credit card within your Chart of Accounts. When you create all business bank and credit card accounts created in QBO, you can correctly record transfers to them and avoid the potential error of a Transfer to an Uncategorized Asset. If you are using a connected business account to transfer money to a personal bank or credit card account, you have taken a Owner Equity Draw. This means that you would categorize the transfer to your Owner Draw or Owner Pay and Personal Expenses account. If you do this routinely, you can create a recurring transfer and a bank rule to automate the distribution.

Your Personal Guide to Seamless Accounting: Advanced QuickBooks ProAdvisor at Your Service

Hey there! I’m Gina, and I’m the proud co-founder of Lend A Hand Accounting. Why did I start this? Well, I believe that everyone should have access to affordable, efficient, and flexible accounting and bookkeeping services. It’s all about making sure these essential services fit snugly into your budget without any fuss.

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I’m not just any accountant though. I’m an Advanced QuickBooks Online ProAdvisor. That means I’m equipped with advanced expertise and resources to help you leverage QuickBooks Online to its full potential. My goal is to make your accounting process smooth and efficient so you can focus on what you do best – running your business.

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At the end of the day, we’re here to serve you. We really appreciate the trust you place in us and we’re eager to meet all of your accounting and bookkeeping needs. Looking forward to being part of your team!

Take care,

Gina

The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.