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How to Record Bank Deposits in QuickBooks Online

 

How to make Bank Deposits in QuickBooks Online 1.png

                                                           
1. Send Invoice            2. Receive Payment into       3. Bank Deposit

"Undeposited funds”

 

After you’ve sent an Invoice and received the payment into your Undeposited Funds account, you need to deposit these payments into an account in QuickBooks (typically into your savings or checking account), just like you would when you visit the bank at the end of the workday. Remember, transactions in QuickBooks should reflect real life - if money is in the actual bank, this should be reflected in QuickBooks.

 

The Bank Deposit feature serves two functions. If payments are received into the Undeposited Funds account, you can group payments and deposit them as a single record into an account. This feature is also where you record items that aren't typically captured on invoices or bills, such as assets and loans. 


 

Why do I add need to use the Bank Deposit feature in QuickBooks Online?

 

As we mentioned in How to Use the Undeposited Funds Account in QuickBooks, the Bank Deposit Workflow is unique to QuickBooks. It's the final step to ensure the money you receive from payments is accurately recorded.

 

As a general rule, depositing money into an account in QuickBooks using the Bank Deposit feature should reflect your real life financial processes; if you received a payment into your savings account, for instance, do the same in QuickBooks.

 

This is also the case for grouped payments; if your bank recognized several payments as a single deposit, you should mirror this process in QuickBooks. Receive those payments into your Undeposited Funds Account so you can group them into a single Bank Deposit. 

 


 

Get started making bank deposits

 

There are a few bank deposit methods available in QuickBooks Online and which one you will use depends on how your original transactions were entered. 

 

Receiving payments against an Invoice (most common)

 

How to make Bank Deposits in QuickBooks Online 1.png1. Send Invoice            2. Receive Payment into       3. Bank Deposit

     “Undeposited funds”

 

After you’ve sent your invoice and received the payments into your Undeposited funds account or recorded a sales receipt for a sale (all accessible from the Global Create Menu [Action Icon.PNG]), click the Global Create Button (Action Icon.PNG) and select Bank Deposit

 

Let's follow the whole process end-to-end with Invoice 1038.

  

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After we received payments from an invoice the Undeposited Funds account, the transactions automatically populate in the “select the payments included in this deposit” section at the top of the Bank Deposit screen. This is by design and why using the above workflow is so crucial for speedy, efficient bookkeeping. 

 

Deposit the payments on the Bank Deposit screen exactly as they appear on your bank records - if you have one payment to deposit, deposit only that payment; if you deposited a group of payments as a single deposit into your bank, select each one and deposit them as a group

 How to make Bank Deposits in QuickBooks Online 3.png

 

If you aren’t seeing what you expect on this screen, take a step back and think about how you entered the transaction. The order of events matters.

Remember,
 if you haven't yet received payment, create and process a new invoice. You can deposit single payments directly into your "checking" account when you first receive a payment for an invoice, but we recommend following the Undeposited Funds workflow and select the Undeposited Funds as the default "deposit to" account when you record payments. Click the link to the article to learn more. 

 

 

Adding assets, loan liabilities, and equity

 

You can manually add funds to deposits in the bottom section of the Bank Deposit screen. This is how you add assets, liabilities and equity to accounts since these don't use or come from sales forms. 

 How to make Bank Deposits in QuickBooks Online 4.png

 

Important - Invoices are not how you add items that you'd enter with the "add funds to this deposit" feature. If you’ve already created an invoice for a sale, finish the workflow by receiving the payment directly into your Checking account or into Undeposited FundsDo not jump ahead and add the invoice payment using the "Add funds" feature. If you enter it here and later deposit a payment to close the open-invoice, you will double count your income.

 

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What about recording Bank Fees?

 

Some banks (but not all) and services like PayPal charge small fees for processing transactions. Why is $.15 an issue? When it's time to do your monthly bank reconciliation, you may find that what you entered into QuickBooks Online doesn't match external records -  the original invoice was entered for $1000.00, but the same transaction with the applied fee is recorded as $999.85 on your bank statement.

 

No worries, there's an easy fix. Process the whole amount as a normal invoice or sales receipt. When you're on the Bank Deposit Screen, go down to the "Add funds to this deposit" section. If you don't have one already, create an expense account and call it something easy to remember, like "Bank Fee."

 

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Enter the bank fee as a line item in the "Adds fund to this deposit" section, select your new Bank Fee expense account and enter a negative value that reflects the bank fee amount. 

 

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   Here's a cool tip - if I know the fee is 1% of the total, enter -1000* .01 and hit the tab key to quickly calculate the fee.   

 

 

 

Adding Bank Deposits from QuickBooks Payments

 

The QuickBooks Payments section only appears if you are using QuickBooks Payments and you are waiting for customer payments to settle. You won’t need to do anything with these payments - your accounts are automatically updated once the payments clear. 

 


Show me how Bank Deposits work

 

I have three invoices for coffee wholesale that have been paid and one sales receipt I entered because I received payment at the time of sale. I don’t have to receive payments for a sales receipt since I’ve already been paid. I click the Global Create Button (Action Icon.PNG) and select “receive payment” for the three invoices into my Undeposited Funds account.

 

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Now that all the payments are recorded in QuickBooks, I am ready to make a few bank deposits. I click the Global Create Button (Action Icon.PNG) again and select Bank Deposit. I see that my sales receipt and three invoice payments (and the correct amounts) are all there, ready to be deposited. Depending on whether I deposited these payments into my actual single or grouped transactions, I can click the box next to the transactions and add as many as I need to the deposit. If payment was deposited as a single transaction, I should deposit them one at a time

 

Be careful - do not batch deposit unrelated transactions unless they weren't deposited in your actual bank the same way.

 

For instance, I have two payments to deposit from unrelated sources and each was processed separately via a 3rd party payment processor. If I select and deposit both using the Bank Deposit feature in QuickBooks, the system will recognize them as a single deposit (see below). 

 

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When I reconcile my accounts at the end of the month, my statement from the 3rd party payment processor will show two separate transactions, one for $100 and one for $387. However, I will only see the $487 deposit in QuickBooks. 

 


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Revision #:
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Last update:
‎08-28-2018 10:18 AM
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Comments
In the bank deposit, why can't I have different customer's in the received from field and the Customer/Project Field for Track Returns for client?