How to create recurring transactions in QuickBooks Online

Oct 17, 2023

How to create recurring transactions in QuickBooks Online

Recurring transactions can be set up for a variety of different reasons in QuickBooks Online. The beauty of this feature is that it’s flexible enough to meet lots of business needs for different types of businesses. 

Create recurring transactions

Recurring transactions in QuickBooks Online can be set up to manage pretty much any of the first transactions in any workflow, like sales receipts, invoices, bills, journals, checks, deposits, or expenses.  It’s a great way to automate money-out transactions, like rental or insurance payments, that are paid at regular intervals and are for a fixed amount.  On the sales side, recurring charges to customers can be set up to invoice for service charges for maintenance contracts when selling a service that means customers pay a fixed fee for maintenance services

With advance customer authorization, you can even set up a recurring charge to a customer’s credit card or ACH debit to a customer’s bank account using a sales receipt

You have the option when setting up an invoice recurring transaction to include unbilled charges and automatically send emails. If set up, you won’t have to remember to generate invoices each month. This will eliminate reminder sticky notes crowding around your computer screen, and will allow your attention to be focused instead on your business!

More advanced recurring transactions can be set up for non-posting transactions, like purchase orders or estimates. Notice that the transaction does not have to be scheduled. So, for example, if your purchase order typically contains the same items purchased but you don’t order on a scheduled basis, select Reminder or Unschedule from the Type drop-down list.

You can even set up recurring journal entries to reclassify deferred revenue or prepaid expenses

Advanced Certified QuickBooks Online ProAdvisor tip

Automating processes with recurring transactions can save time and headaches when you’ve got regular predictable activities, whether they’re expenses or sales activities like invoices. However, the automation requires some involvement to make sure invoices for cancelled or held work don’t go out automatically!

The great thing about QuickBooks Online’s recurring transactions functionality is that it allows you to create them to match your circumstances and needs.  You can set up a regular, recurring sales receipt for goods shipped out to a customer every month. Remember, a sales receipt means you get paid at the time of sale, so, provided you are signed up for QuickBooks Payments and has prior authorization to charge the customer, you can set up the payment as part of the recurring sales receipt transaction.

Creating a simple recurring transaction

For example, you paid your first month of rent by check but since this is a regular payment you need to make, you can set up a recurring transaction so this gets recorded every month. Assume you already set it up for your bank to make the payment on your behalf. 

1. Select the Gear icon
2. Select Recurring transactions
3. Select New
4. Now choose Expense as the new Transaction Type from the drop-down list and select OK
5. On the new screen, enter Your Landlord’s name monthly rent as the template name. Best practice is to list the Name (Vendor/Customer/Employee) in the Template name. This makes it easier to identify what names have recurring templates
6. As the type, make it Scheduled. It’s probably selected already
7. We’re going to create the recurring transaction 5 days in advance
8. The payee is Your Landlord vendor, so add that from the vendor list
9. Make the account from which the payment will be made Checking
10. Select Monthly as the interval
11. Make the payment on the first of the month, starting at the beginning of next month
12. Don’t add an ending date
13. There’s no need to enter a payment method or reference number
14. In the Account details section, select the Rent account
15. Enter the monthly rent amount
16. Select Save template

Advanced Certified QuickBooks Online ProAdvisor tip

A customer, Vendor, Employee, Product/Service or Account cannot be deleted if they are on a recurring transaction.

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I am an Advanced Certified QuickBooks Online ProAdvisor, specializing in cloud accounting using QuickBooks Online, I can work with you even if we are not in the same part of the US.  Contact me to schedule a virtual meeting to learn how I can help you.