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neilb80
Level 1

How do i record invoices which are paid as deposited if the cash has been paid straight to the directors?

Rather than pay the cash to the bank we pay it directly to ourselves. However this leaves all of the cash invoices in the undeposited funds account and thus skews the revenue and thus tax etc. the invoices appear as undeposited. how do i 'tick them off'? thanks for any help.
5 REPLIES 5
Carneil_C
QuickBooks Team

How do i record invoices which are paid as deposited if the cash has been paid straight to the directors?

Hello there! @neilb80. Welcome to QuickBooks Community! I'm very eager to share some workarounds and information about your concern.

 

In response to your query, you’ll have to create a journal entry to link the amount from your Undeposited funds. This will zero out the amount in this account.

 

You can create a journal entry by following these steps below:

 

     1. Select + New.

     2.Select Journal entry.
     3.On the first line, select an account from the Account field. Depending on if you need to debit or credit the account,  enter the amount in the correct column.
    4. On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
    5. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
    6. Enter information in the memo section so you know why you made the journal entry.
    7. Select Save and new or Save and close.

 

Otherwise, I’d still recommend reaching out to your accountant about which account to use for the journal entry.  

 

For future reference, I also include this on link how to create negative entries from undeposited funds and the bank deposit screen.

 

I'll be glad to help you if you have any other questions.​ Have a good day!

neilb80
Level 1

How do i record invoices which are paid as deposited if the cash has been paid straight to the directors?

Good morning, 

 

Thank you for assisting.

 

The accountant already has me doing a journal entry just as you have suggested. however using this method doesn't mark the 'paid' invoices as 'deposited'. This isn't a huge problem but it does mean that when i 'match' other bank deposits with the invoices there are hundreds of invoices to wade through. hope that makes some sense. i don't know the best way to describe it. 

 

Again, thank you. 

Rubielyn_J
QuickBooks Team

How do i record invoices which are paid as deposited if the cash has been paid straight to the directors?

I appreciate you for getting back to this thread, @neilb80. Allow me to chime in and provide additional steps to help record the invoice.

 

In QuickBooks Online, to change ang status of the invoice from paid to deposited, we can create a deposit in your account. To do this, here's how:

 

  1. Click the + New button.
  2. Choose Bank Deposit.
  3. From the Account ▼ dropdown, select the bank you want to put the money into.
  4. Click the checkbox for each transaction you want to combine.
  5. Make sure the total of the selected transactions matches your deposit slip. 
  6. Lastly select Save and Close.

 

You can also review this article for more info: Record and make bank deposits in QuickBooks Online. This also includes steps how to manage, remove the payment and delete your deposits.

 

In addition to that, I've attached a link to help you generate reports. This will help you track your sales, spending and provide you the snapshot of your business: Run reports in QuickBooks Online.

 

Fill me in if you need further questions about handling your invoices. I'll be happy to help you again. Keep safe!

neilb80
Level 1

How do i record invoices which are paid as deposited if the cash has been paid straight to the directors?

Goor morning, thanks for chipping in. Your suggestion would work if i was putting the money into the account but i am not. i use that as my directors draw. it saves me trips to the bank and lots of fees for banking. 

 

Thank you 

Giovann_G
Moderator

How do i record invoices which are paid as deposited if the cash has been paid straight to the directors?

I can share another way to pay the invoice straight to the director's draw, neilb80.

 

You can apply a credit to an invoice by using a journal entry. I'll show you the step-by-step process.

 

Create a journal entry:

 

  1. Go to the + New icon.
  2. Select Journal Entry.
  3. On the first line, select an account where the money is taken out. Base on your situation, you can choose Director's Draw. Enter the amount in the Debit column and ensure to assign it to your customer.
  4. On the second line, choose the Debtors account. Enter the amount in the Credit column and assign it to your customer. Please see the image below.
  5. Once done, hit Save and close.

 

Apply the journal entry as a credit to the invoice:

 

  1. Click the + New icon.
  2. Select Receive payment.
  3. Choose the customer under the Customer dropdown.
  4. In the Oustanding Transactions, select the invoice.
  5. In the Credits section, ensure to select the journal entry to be applied as credit.
  6. Once done, hit Save and close.

 

You can check out the following article for more details: How to apply a journal entry credit to an invoice. Also, please contact your accountant to confirm that your books are correct.

 

Alternatively, you can create a transfer from the Undeposited fund to the Director's draw. 

 

Here's how:

 

  1. Click the + New icon.
  2. Select Transfer.
  3. In the Transfer Fund from, choose the Undeposited Funds.
  4. In the Transfer Funds to, select the Director's Draw account.
  5. Enter the amount.
  6. Once done, hit Save and close.

 

In addition, I've got this helpful resource to make sure your bank transactions are put in the correct account: Categorise and match online bank transactions in QuickBooks Online.

 

You can always add any details below if you require further assistance. We're here to help you.

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