Record Deposits in QuickBooks

Posted by on Jan 29, 2011 in Customers Module | 4 comments

Moving along, you have finished receiving the payments for invoices that you generated and now have to deposit these amounts into the bank that you originally set up in QuickBooks. As always we start off at the Home page.

In the Banking section you will find a Record Deposits icon which when clicked will take you to the Payments to Deposit. There you will see the three payments that you received, a cheque, visa and wire transfer. Underneath the check mark column click off each line until all three have a visible check mark.

You will now notice at the bottom left of the screen that QuickBooks has subtotalled the amounts for you and you will see the 1,428.00 figure.

I will pass along a tip here for those who process a large number of deposits. Now you may have physically deposited say 20 items over several days, that is not all were deposited on the same day. You need to work from your deposit book and make sure that you check off only the items that are pertinent to that day’s deposit. Otherwise you will have incorrect deposit amounts when you do the month’s reconciliation.

As there are only three items here and they all belong to the same deposit day, you can click on OK, which directs you to the Make Deposit screen.

Working from the top left of the screen, the cursor will be in the Deposit To field and next to it is an arrow. This field is looking for your bank account that this deposit will go into. Be careful here in case you have more than one bank as it could end up in the wrong account.

The default in this field is the example that was set up and is the RBC bank. Tab to the date field and use the date that the cheques were received, which was February 21. The next tab takes you to the Memo field which is using the default word Deposit. Accept that and tab to the Received From field. That column will have all the Customer names that you received monies from.

From Account is the next field you will tab to. This field shows the Undeposited Funds account which is an account that QuickBooks creates. The amounts that sit in this general ledger account should always reflect amounts that have not been posted to your bank account. Once those amounts are posted, the account will then revert back to zero. So this account acts like a clearing account.

The next field is the Memo and then Chq No fields and if you missed entering information into them you can do so at this time. Pmt Meth. field has an arrow with a drop down box which will list the same methods of payment that you saw in Receive Payment.  The Class field we will not use here, and the last field on that line is the Amount which is the figure that came from Receive Payment (1,428.00).

In the bottom left-hand corner of the screen is a field entitled Cash back goes to that is used when cash is requested. You may have a Petty cash account that needs to be replenished and if so the amount that was given back in cash would be charged to the Petty cash account, and information regarding this would be recorded in the Cash back memo and Cash back amount fields.

Once you have finished you will tab to the Save & Close and, making sure that your subtotal (1,428.00) agrees with your physical bank deposit total, click on it to post that amount to your bank account and update the amount presently in it. If you have more than one deposit to record you would have used Save & New.

To confirm the above go to your Home page, in the Company section click on Chart of Accounts, highlight the bank in question (RBC) and double click on it and this will open the register. On one of the lines you will see the deposited amount (1,428.00) along with an updated amount and an ending balance of your QuickBooks bank account.

Remember that QuickBooks keeps an ongoing record of monies in and monies out, and does not have a clearing time frame unlike your physical bank. Thus this QuickBooks bank total does not always reflect a current amount that is in your physical bank. Be careful to remember this if your boss asks you what the bank balance is.

Remember that you can follow me on Twitter @twitter.com/QuikBooksTrainr for tips and updates also.

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4 Responses to “Record Deposits in QuickBooks”

  1. I am having an issue reconciling my accounts. Our church members give offerings through Paypal, for every offering Paypal deducts $8. So the deposit made to our bank through Paypal is $8 less than the actual offering amount. Example: Member donates $200 through Paypal, Paypal deposits $192 into the bank account. We want the member to be credited for the full amount donated, which is $200, how should I post this on QuickBooks Pro?

    • Hi Milka. The best way is to set up PayPal as a Bank account. In Make Deposits, use the PayPal to make the Deposit. The Customer “Member” would be 200.00 you received on the first line. On the second line the eight dollars would be entered as a -8.00, the PayPal fee. In the Account field, use Bank charges for the $8.00. This would calculate out to a $192.00 deposit $200 – 8 = $192.00.
      You then transfer the $192.00 from your PayPal bank to your business bank account on the date you receive it from PayPal.
      Hope that helps.

  2. How do i record a cash deposit in quickbooks i work at an insurance agency and we take customer payments and deposit them into an account and then the insurance companies sweep the payments out how would i record a cash deposit
    everytime i try to make a deposit it makes me select a source account? we only deposit the customer payments their payment is not our source of income it gets taken out of our account almost immediately

    • This is an extremely hard question to answer without seeing your actual company file and how those transactions are going to be used, but I’ll try.
      If the Customer payments are not a source of income, then set up a bank account and use it as a clearing account (source account or from account). When the sweep is made, make a transfer entry from the clearing account to the actual bank account it is going to.

      Hope this helps.

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