QuickBooks Online: Mastering Bank Deposits

Understanding how to accurately record bank deposits in QuickBooks Online is crucial for maintaining precise financial records and ensuring your bank accounts reconcile correctly. This guide will walk you through the primary methods for making deposits, from handling customer payments to recording direct inflows.

1. Depositing Customer Payments (Using Undeposited Funds)

This is the most common method for businesses that receive payments from customers (via invoices or sales receipts) and then deposit them together into the bank. Undeposited Funds acts as a temporary holding account.

Steps:

1
Receive Payments: When you receive a payment for an invoice or a sales receipt, ensure it's recorded and deposited into the "Undeposited Funds" account.
2
Navigate to Banking: From the left navigation menu, go to + New and select Bank Deposit under "Other."
3
Select Bank Account: Choose the bank account where you want to deposit the funds from the "Account" dropdown.
4
Select Payments to Deposit: In the "Select the payments included in this deposit" section, check the box next to each payment you are depositing. Make sure the total matches your physical bank deposit slip.
5
Add Cash Back (Optional): If you received cash back from this deposit, you can enter the details in the "Cash back goes to" section.
6
Save and Close: Click Save and close or Save and new.

2. Recording Direct Deposits (Not from Customer Payments)

This method is used for recording money directly deposited into your bank account that isn't a payment from a customer (e.g., owner's contribution, loan proceeds, refunds, or interest income).

Steps:

1
Navigate to Banking: From the left navigation menu, go to + New and select Bank Deposit under "Other."
2
Select Bank Account: Choose the bank account where the funds were deposited.
3
Add New Deposit Line: Scroll down to the "Add funds to this deposit" section.
4
Enter Details:
- Received From: (Optional) Enter who the money was received from.
- Account: Select the appropriate income or equity account (e.g., "Owner's Equity," "Interest Income," "Loan Payable").
- Amount: Enter the deposit amount.
- Memo: (Optional) Add a brief description.
5
Save and Close: Click Save and close or Save and new.

3. Recording Sales Receipts Directly to Bank

If you receive a payment for a sale and deposit it immediately and individually into your bank account (e.g., a single credit card transaction that clears directly), you can record the sales receipt directly to the bank account, bypassing Undeposited Funds.

Steps:

1
Create Sales Receipt: From the left navigation menu, go to + New and select Sales Receipt under "Customers."
2
Fill in Details: Enter the customer name, date, and product/service details.
3
Deposit To: In the "Deposit to" dropdown, directly select the bank account where the funds were deposited (instead of "Undeposited Funds").
4
Save and Close: Click Save and close or Save and new.

By correctly categorizing and recording your bank deposits using these methods, you'll ensure your QuickBooks Online accounts are accurate, making bank reconciliation a smooth and efficient process.