Recording Payments & Adding Deposits

Single payment for a single deposit

You have made a deposit at the bank for a check you received from a customer. You now need to record this payment in QuickBooks Online (QBO) to 1) mark the open invoice(s) paid and balance out your accounts receivable and 2) record the payment to your bank general ledger account.

Here are the steps to complete this transaction in QBO:

1. Select + New.
2. Select Receive payment.
3. From the Customer dropdown, select the name of the customer.
4. From the Payment method dropdown, select the payment method (credit card, debit, PayPal, Venmo, or ACH bank transfer).
5. From the Deposit to dropdown, select the Bank account you made the deposit into.
6. In the Outstanding Transactions section, select the checkbox for the invoice you’re recording the payment for.
7. Enter the Reference no. (i.e. check #) and Memo if needed.
8. Select Save and close.

Grouping multiple payments together into a single deposit.

Now the scenario is, you make a deposit at the bank that includes numerous checks. In this situation, you will want to use the Undeposited Funds general ledger account in QBO to record the payments received. This allows you to group several payments into one deposit transaction in QBO. More importantly, this will match to your bank feed and make bank reconciliations at the end of the month breeze.

Each bank deposit creates a separate record in QBO. Make deposits one at a time for each of your deposit slips.

Here are the steps to complete this transaction in QBO:

1. Select + New
2. Select Bank Deposit
3. From the Account🔽dropdown, choose the Bank account you want to put the money into.
4. Select the checkbox next to each payment transaction you want to combine.
5. Make sure the total of the selected transactions matches your deposit slip and/or your bank deposit at the bank. Use your deposit slip and/or receipt as a reference.
6. Select Save and close

Lastly, it is a good practice to review the undeposited funds account on a regular, monthly basis. Any outstanding payments that have yet to be cleared out with a deposit need review and resolution.

NOTE: All transactions in your Undeposited Funds account will show in the bank deposit window.  If you don’t see a payment transaction, you have most likely chosen the Bank account from the ‘Deposit to’ dropdown window instead of undeposited funds.  You will need to edit that payment and put it in the undeposited funds account.

Now let’s test your knowledge with this quick little quiz.

QBO Knowledge

Test your knowledge and skill when it comes to QBO recording and making a bank deposit.  

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Sometimes the easiest of bookkeeping tasks can lead to a messy issue within your accounting records. May this article be of some assistance to you and/ or your staff.

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