Question about Categorizing Transactions

Hello there, @Rfin. Welcome to the Community. Also, I appreciate the screenshot you've provided above. This way, I can provide the exact resolution for this.

You're already on the right track in categorizing transactions in QuickBooks Online (QBO). Matching your downloaded bank transactions to the existing entries in QBO will keep your account updated. Based on your screenshot above, it's either you've recorded both transactions (payment and deposit) incorrectly or you have duplicate ones.

To resolve this, you'll have to open each transaction (both payment and deposit) to check on how you've recorded them in QBO. You just need to click them to open their details. Then, you'll have to delete the incorrectly recorded or duplicate transaction so you can match the correct one accordingly. 

Once done, match the invoice payment to the downloaded bank transaction by performing the steps in this article's Match with an existing transaction section: Categorize online bank transactions in QuickBooks Online.

Also, I'd recommend reconciling your accounts every month. This way, you can effectively monitor your income, expenses, and identify any possible errors. You can refer to this article for the step-by-step guide: Reconcile an account in QuickBooks Online.

Additionally, to further guide you in managing the growth of your business, you can check out this article:  QuickBooks Help Articles. It includes topics about data security, banking, and expenses, to name a few. You can click the + More topics button to view other selections.

Let me know how it goes in the comments below. If you have other banking concerns or inquiries about managing transactions in QBO, I'm just around to help. Take care always.

Thanks for the reply!

So what should I be doing when I receive a check? Should I receive the payment? Or wait until the check deposits and then match that transaction to the invoice?

And what payment should I delete here? The receive payment (me manually adding the check) or my bank account registering the deposited check?

Thanks for the reply!

So going forward should I not receive the payment in Quickbooks by manually entering the check information and just wait for the bank to deposit the check and match that transaction?

And should I delete the receive payment I added or the bank's transaction of the check being deposited?

You don't need to wait for the bank transaction, Rfin.

There is a simple process to record the invoice-payment check. I'll guide you through the steps:

1. Simply open the invoice and click Receive Payment.
2. On the Receive payment page:

• Enter the date.
• Choose Check as the Payment Method.
• In the Deposit to field, choose your business account if the check is already issued and deposited.
• Enter the amount.
• Click Save and close.

That's it. When your transaction is downloaded, you can match it to the payment, not the invoice.

Right now, you can delete your check transaction and do the steps above.

Please note that payment should always be linked to an invoice to avoid doubling your declared income. Please check out more details in this article: Record an invoice payment.

Feel free to go back to this thread if you need more help with recording payments.

I followed those steps exactly and had the same problem.

Attaching screenshots so you can tell me what I did wrong!

Thanks for following the steps and for the screenshot, Rfin.

I assume this Payment (Receive Payment) transaction is linked to the invoice. Therefore, you can just match the bank transaction to it. Then, delete the Deposit transaction because you already have the payment. That will do it.

I'm just around if you have another question.