Manually entering a bank deposit and matching to invoice payments

Thanks so much MirriamM

really appreciate your help - probably very simple question, but it definitely confused me :)

Thanks again. MBear x

This creates a new problem for me. Now the amount of the bank deposit (where I chose the Accounts Receivable account) shows up as a negative amount in my A/R Aging report. That doesn't belong there. How to resolve this problem?

I figured out my problem. When I went to Receive Payment, I was entering an amount in the Amount Received box in the header. Then when I checked the invoices that were being paid and finally selected a credit at the bottom (the bank deposit), it was leaving the customer a negative balance in the A/R aging. Essentially, by entering an amount received in the header, I was saying that the amount had been received over and above the amount of the credit. When I blanked that out to zero, selected the invoices to be paid, and then select the credit and the bottom, everything worked out fine.

Hello MiriamM,
This way of applying payments to a customer invoice seems very complicated compared to simply receiving a payment directly from the bank feed by selecting a customer and the relevant invoices - the same as with Quickbooks Desktop. I've just transitioned to Quickbooks Online and think that the desktop method is far easier! Your thoughts would be appreciated 

Hi! Can you please advise how to do this process for QuickBooks Desktop? i need help matching an invoice payment that i manually created in QuickBooks desktop to a deposit in my Bank Check Register. I'm noticing my revenue increase (duplicate) when i run a P&L report. Please help at your earliest convivence. 

Good to see you on the thread, @gemma13. I'll be happy to guide you on how to match your transaction.

Depending on the mode of the bank feeds, there are different ways to match transactions in QuickBooks Desktop (QBDT). They are as follows:

• Express mode
• Classic mode
• Advanced mode
• Manually match transactions

If you use the Express mode, the system attempts to match bank feeds transactions to any entries you enter. If no match is found, QuickBooks will generate a new transaction for you. So, before adding them to the register, I recommend double-checking the found match.

A checkmark will appear for transactions where QuickBooks found a match. Select Add/Approve or Approve from the Batch Actions or Actions dropdown if you agree with the match. Otherwise, the transactions will remain pending.

However, if you're using a different mode, you can visit this article for guidance in matching your transaction: Add and match Bank Feed transactions in QuickBooks Desktop.

For future reference, here's a great resource about the best practices when reconciling: Learn the reconcile workflow in QuickBooks.

Please let me know if there's anything else I can do for you. I'll be standing by for your response. Have a great day.

Hi- the same thing happened to me. I'm glad you found a solution but I'm having a hard time following. How did you change this for the invoices and deposits that you already connected? Thanks!

Hello there, @chrisfinley.

I'll be glad to help you with your concern. I would appreciate if you provide more information. This way, I can give you the resolution you need. If you are getting an error, a screenshot will help us.

I want to understand more about the change for invoices and deposits already connected. What are you trying to change, and where is it connected.

Don't hesitate to comment below for additional information. I'm always here to help. Have a great day.

Hi @Ethel_A  - the same thing happened to me that @pwdennis2 described above where the A/R aging report shows a negative balance. Please advise. thanks

I appreciate you joining this thread, @Chris_Accounting_2023. Correcting the negative balance on your A/R aging report is essential to align invoices and collect payment on past due. I'll help you figure it out as we go along some steps.

If you see negative balances, it indicates that your customer has paid more than what you billed them. In this case, there might be open or unapplied payments that need to be accounted for due to the customer's overpayment status.

If there are no invoices, create one to apply the payment. It will remove the negative amounts from the A/R Aging report from your deposits. Once done, let's proceed to link it to the payment.

1. Press on +New.
2. Select Receive Payment.
3. In the Receive Payment window, choose a customer.
4. Enter the date when the payment was made.
5. Under the Outstanding Transactions section, put a check mark on the invoice you want to pay.
6. In the Credits section, select the credit or deposit.
7. Hit on Save.

Moreover, please review the payment date if it's not earlier than the invoice date. How you process the payment also affect your  customer's current outstanding balance. 
 

To give you more insights regarding managing customers overpayment in the system, feel free to check out this link: Learn what to do in QuickBooks Online when a customer overpays you.

I'll be around to help if you need further assistance. Have a good day. 

Hi @JamaicaA - The double payment didn't show until I followed these original steps to mark the invoice as paid. 

To start, let's check a few things before linking a deposit to an invoice. These are the following:

• Ensure you've created an invoice for the customer.
• Verify that the payment hasn't been entered and linked to the invoice.
• Make sure the payment was entered through Bank Deposit and not through Receive Payment.

Once verified, let's find the deposit entry on your bank register, here's how:

1. In the left menu, click Accounting. 
2. Go to the Chart of Accounts tab. 
3. Locate the account you deposited the payment to and select Account history.
4. Find and select the correct deposit.
5. Click Edit.
6. In the Add funds to this deposit section, find the deposit.
7. Choose the Received From ▼ dropdown, and select the customer the deposit was from.
8. In the Account ▼ dropdown, select Accounts Receivable.
9. Choose Save and Close.

After that, to apply the deposit entry as an invoice payment, let me show you what to do:

1. In the left menu, click the + New button.
2. Choose Receive Payment.
3. Select the Customer from the ▼ dropdown. 
4. In the Payment date field, enter the day you received the payment.
5. Go to the Outstanding Transactions section, select the invoice you need to mark as paid.
6. Under Credits, select the deposit.
7. Select Save and Close.

That's it! You're now able to link a deposit to an invoice. 

To share more detail, I had already created the invoice and marked received the payment via a zelle payment to my checking account. I have my bank account synced with Quickbooks, and the zelle payment went directly into my checking. I've read more into this and am wondering if my deposits should first go to "undeposited funds". If so, can you please advise on this? Thanks

Hello, @Chris_Accounting_2023.

Allow me to chime in and share some information about money movements in QuickBooks Online.

Yes, payments from customers usually go into the "Undeposited Funds" account first. This account holds the payments until you're ready to deposit them into your actual bank account.

Upon receiving customer payments, you'll log them in your accounting software, not directly in the bank account but in the "Undeposited Funds" account. As multiple payments accrue, you'll initiate a deposit transaction to shift these funds from "Undeposited Funds" to your verified bank account.

Let me share these articles with you for more details:

• What’s the Undeposited Funds Account?
• How to Use the Undeposited Funds Account to Receive Payments in QuickBooks Online

I'd also like to give you these articles for additional guidance and reference about using the Undeposited Funds account in QBO:

• Learn About the Chart of Accounts in QuickBooks
• Record And Make Bank Deposits in QuickBooks Online

Please know that you can always reply or reach out to us again if you have other questions. We'll make sure that everything is sorted out.

@DebSheenD  I've seen some of those links. They don't address the situation where my bank feed is already connected and automatically downloads the transactions to checking. What do I do in that situation? Currently all of the checking account transaction go into my checking account in QBO and not undeposited funds. These transaction include zello payments from customers. I pulled this statement from another article. 

Transactions you download from your banks and credit cards

If you connect your bank and credit card accounts, QuickBooks automatically downloads all your transactions. You don’t need to combine downloaded transactions or use Undeposited Funds since QuickBooks already has the info from your bank. All you need to do is categorize your downloaded transactions.

I'm using QBO. I also found this link. Will the steps posted by JessT on January 19, 2023 09:28 AM work for this situation? I've seen others say I need to exclude the transaction that was automatically added. Not sure what the best way is. Let me know what is the best way. 

We appreciate you getting back here in the thread, Chris.

The Community Team aims to provide concise information to help customers address their queries in a timely matter. It's our priority to improve their experience when using QuickBooks Online (QBO) to handle the recording side of their business. What the previous representative provided is for transferring funds from your checking account to your bank account, and upon reading through your post, the response provided by one of our colleagues, Jess, is the ideal process when dealing with money movement from one bank to another. You may take note of it to and apply it for future transactions to ensure they won't cause any changes to your report.

In your situation, it looks like the transaction's posted twice. It is why it shows changes in your data, and in cases like these, you have two options to deal with the double posting. You can either Exclude the downloaded transactions or delete those that added to your undeposited funds if you're using it. If you wish to push through with excluding transactions, we'll gladly input the steps below:

1. Access your QuickBooks Online company.
2. Go to Bookkeeping, select Transactions, then select Bank transactions (Take me there).
3. Click the For Review tab.
4. Select the checkbox of the transactions to exclude.
5. Click Exclude.

See this page for more details: Exclude a bank transaction you downloaded into QuickBooks Online.

Furthermore, here are some articles to help you manage bank transactions, reconcile an account, and ensure they matches your data inside QBO:

• Categorize online bank transactions in QuickBooks Online.
• Learn the reconcile workflow in QuickBooks.
• Run reports in QuickBooks Online.

We'll be here if you need further assistance managing bank transactions inside QuickBooks, Chris. You can also visit us anytime if you have any questions related to the program. Take care, and have a great week!