The Basics of Depositing Payments in QuickBooks
As your business grows, manually entering customer payments on paper deposit slips becomes increasingly time-consuming. QuickBooks offers efficient tools to streamline the process of transferring funds into your bank accounts, regardless of whether you accept cash, checks, or credit/debit cards. This guide will walk you through the essentials of depositing payments in QuickBooks, helping you manage your cash flow more effectively. In fact, part of your job is done when you enter the payments on the Receive Payments or Sales Receipt screens.
🏦 Choosing Your Deposit Method
When you record a payment in QuickBooks, you can enter it in one of two ways. Ask us if you are not certain which one best suits your business. Payments can be deposited:
- Direct Deposit to a Specific Bank Account
- QuickBooks lets you specify an individual account for each transaction. If you select this option, a box labeled DEPOSIT TO will appear on the Sales Receipt and Receive Payment screens.
- Select an account from the drop-down list, and your payment will be automatically deposited into it.
Figure 1: You can choose to deposit customer payments to specific accounts.
- Deposit to Undeposited Funds.
- An asset account that can hold multiple payments
- Requires manual processing for actual bank deposits
If you decide to have all payments sent to the Undeposited Funds account, you can establish that as your default.
- Go to Edit menu and select Preferences | Payments | Company Preferences.
- Then make sure that the box in front of Use Undeposited Funds as a default deposit to account is checked.
Figure 2: Check the box on the right if you want payments sent to the Undeposited Funds asset account. You will make the actual deposits later. If this box is not checked, a DEPOSIT TO field will appear on the Sales Receipt and Receive Payments screens.
🧾Handling Other Deposits
What about the money you receive that is neither payment on an invoice you sent nor payment for an item or service received immediately? There are many situations where this might be the case, including:
- Vendor refunds, rebates, etc.,
- Unsolicited donations [for non-profits], or
- An owner’s investment in the business.
For funds not related to invoices or immediate sales:
- Navigate to Banking menu and select Make Deposits to open the Payments to Deposit window. Click OK
- In the Make Deposits window, complete:
- Deposit To
- Date
- Memo
- In the table below them if you have not already used the Tab key to get there. Use the drop-down lists to select (or add):
- The individual or company who submitted the payment
- The account where it should be tracked
- The payment method
- The amount.
- Enter any additional information needed, fill in the optional Cash back goes to fields, and then save the transaction.
Note: While you are working in the Make Deposits window, you can click the Payments button at any time to open a new window containing customer payments that need to be deposited if you want to process them simultaneously.
You may also want to use the Attach tool for miscellaneous payments to store related documentation.
💼Depositing Undeposited Funds
You should process your Undeposited Funds on a regular basis, whether every day, every few days, or weekly, depending on your banking needs. To do this:
- Go to Banking | Make Deposits.
Figure 3: You can either view all of the unprocessed payments in Undeposited Funds in a single list, or you can display them by type.
- The Payments to Deposit window will open if you have pending payments in your Undeposited Funds account.
- Put a check mark in front of all of the payments you want to deposit by clicking in the column to the left of the DATE column.
- Click OK.
- In the Make Deposits
- Choose the account where you want the money deposited
- The date
- Aadd a memo
- Request cash back if desired.
- Save your work when you are finished.
Pro Tips
- Process Undeposited Funds regularly (daily, bi-weekly, or weekly) based on your banking needs
- While in the Make Deposits window, click the Payments button to view and process any pending customer payments
- For credit/debit card payments, additional steps are required to ensure your books balance accurately
By mastering these QuickBooks features, you can significantly streamline your payment processing, ensuring that your hard-earned money reaches your bank accounts efficiently and accurately.
Need assistance in optimizing your QuickBooks setup for payment processing? Our team of QuickBooks experts is ready to guide you through the process, answer any questions, and help you implement best practices tailored to your business needs. Contact us today to enhance your financial management and improve your cash flow.