Depositing customer payments is one of your more pleasant business tasks. Here’s how it’s done in QuickBooks Desktop.
If you’re still completing your accounting tasks manually, depositing your receivables can be time consuming, prevent your QuickBooks data from being up-to-date, and even result in inaccurate accounting records due to manual error.
QuickBooks Desktop can simplify the process of recording deposits with the QuickBooks Payments feature, by processing deposits automatically. But even if you're still receiving payment via paper check or cash from some customers, there are QuickBooks tools that can help you prepare deposits by selecting payments you’ve already recorded and getting them ready to present to the bank. This is another example of how the software's automation can help you avoid unnecessary, tedious bookkeeping chores.
How Do You Record a Payment In QuickBooks?
When receiving cash or a check from a customer, QuickBooks allows you to record it in the Receive Payments window. You can select the customer and enter the amount in the fields provided. You can also select the type of payment (cash, check, credit/debit card, or e-check). If the customer has outstanding invoices, you’ll see them listed at the bottom of the window. Double-check your work and save the transaction.
Tip: Your list of payment methods can be customized to show only the ones you offer, helping you avoid clerical errors. To modify your existing list, navigate to the Lists menu and click Customer & Vendor Profile Lists | Payment Method List. Open the Payment Method menu in the lower right to add a new one or edit or delete existing ones.
You can record customer payments in this QuickBooks window.
Where Do the Payments Go?
Unless you have instructed QuickBooks to do otherwise, payments you record automatically go into an account called Undeposited Funds, where they remain until you deposit them.
Warning: While there is a way to specify a different account for your payments, we don't recommend attempting this on your own. Instead, reach out to us first, so we can explain the process and how your QuickBooks will be affected.
To see your Undeposited Funds account, click the Chart of Accounts icon on the home page or open the Company menu and select Chart of Accounts. Scroll down a bit until you see Undeposited Funds. Double-click it to see all of the transactions contained there, but don’t alter them. This account is just a holding place for transactions in transition.
How Do You Process a Deposit?
When you've recorded your undeposited funds in QuickBooks and are ready to make a deposit in-person, you can prepare a deposit slip by one of two ways. You can fill out a deposit slip provided by your bank, handwriting in the details of your deposit. Or, you can add some automation to your routine with printable deposit slips that are compatible with your QuickBooks software. These slips reduce time spent completing double entries and can prevent mistakes from happening during the manual transcription process.You can purchase these deposit slips through us with your company's information pre-printed on them; reach out to us for assistance if you like. Before printing your first deposit slip from QuickBooks, you'll need to get QuickBooks set up to print deposit slips; you can follow this helpful tutorial to get started. Once that's set up, you can create and print a deposit slip from QuickBooks by navigating to the ribbon bar at the top of your screen and selecting Print Option. Once you're ready to take your undeposited funds to the bank and your deposit slip is prepared, click Record Deposits on the home page in QuickBooks. A window like this will open:
From this window, you’ll select the payments you want to deposit.
If you have a high volume of receivables in Undeposited Funds, use the Select View feature at the top of the window to modify how you see individual transactions sitting in undeposited funds. Then click the check boxes in front of every payment you want to include in the deposit. Compare the Payment Subtotal to your deposit slip to make sure they match. When you’re satisfied, click OK.
In the upper left corner of the Make Deposits window that opens, make sure the Deposit To window displays the correct account the funds are intended for and that the Date of deposit is correct. Add a Memo if you’d like. If you want to receive cash back, select the destination account and enter the amount in the lower left corner of the window. When everything is correct, save the deposit. Your account register will now reflect this transaction.
Tip: A quick way to look at an account register is to open the Banking menu and select Use Register. Choose the account in the window that opens.
Let us know how we can help.
While the mechanics of creating a deposit in QuickBooks aren't complicated, it's important to be methodical when processing payments made by cash or check to avoid making errors. If you'd like to learn more about QuickBooks Payments, reach out to us. We're happy to walk you through setting up this feature to increase automation in your accounting processes!