How to Record and Match Bank Deposits in QuickBooks Online & QuickBooks Desktop
Every business owner who manages their own cash and check transactions knows that it can be frustrating to try and keep all your records accurate and matching with one another with no issues. It’s extremely important for tax and bookkeeping purposes to ensure that these records are all in agreement in terms of dollar amount and timing, and keeping it all organized gets more and more complex the bigger your business gets.
The issue really stems from a difference in the way businesses and banks process and record their transactional information. Let’s say, for example, you run a small business that specializes in grooming dogs. You have several customers a day that each pay for their appointment with varying methods. Some use their credits cards. That’s no problem, because their money essentially goes straight into your bank account with no intermediate step. However, some customers elect to pay with cash or a check. You collect each hard payment in the same place – the cash register, for example – and then at the end of the week, you go to your bank and deposit the money.
That’s where issues can arise. For tax, audit, and finance reasons, you need to ensure that the dollar figure for each individual customer transaction remains separate and accurate. However, for your own records, you also need to account for every cash transaction as a portion of a bank deposit. Luckily, both QuickBooks Online and QuickBooks Desktop allow you to do this easily, although the methods for accomplishing it within each software is a little bit different. We’ll start with QuickBooks Online.
How to Record and Match Bank Deposits in QuickBooks Online
QuickBooks is well-known for its ability to make everyday accounting processes as simple as possible. The same is true for their deposit-matching system. With very little effort, you can get all your information matching and ready for your next internal audit, monthly financial checkup, or for Tax Day itself.
In order to get started sorting your payments by deposit in QuickBooks Online, you first need to organize all of your cash and check transactions into the Undeposited Funds Account. This account exists for this very purpose. It allows you to keep all of those “loose” transactions in check before you deposit them.
After you make the deposit at the bank, you’ll need to go into QuickBooks Online and make a matching record. Here’s a simple walkthrough.
You need to create what’s called a new bank deposit record. To do this, click “+ New”, and then click “Bank Deposit”. You’ll need to select the correct bank account from the “Account” drop-down menu. This, of course, will be the bank account you just deposited the payments into. Then, just select the box for every transaction you just deposited. This will make a record of that deposit, and will list each of those payments in the details so that it’s all accounted for.
It’s imperative to ensure that you didn’t miss any transactions entirely, that you didn’t add any transactions on the QuickBooks deposit record that weren’t actually deposited, or that you didn’t forget any physical cash or checks when making the actual deposit at the bank. Make certain that the total for the online deposit record you just created matches perfectly with the amount stated on your bank’s deposit slip. If those numbers do not match, something went wrong. Retrace your steps and make sure you got everything.
If you can’t find the source of the discrepancy, you may need to check your deposit slip and see if there were any fees associated with the bank deposit.
These fees are easy enough to add in QuickBooks Online. Just go to the deposit record in question and select “Add funds to this deposit”. Add the fee as a line item, fill out the information, and select “Bank Charges” from the “Account” drop-down menu. Remember, this is a fee, not a payment to you. As such, you need to record it as a negative number (for example, -$1.50).
It’s important to note here that after you create a bank deposit in QuickBooks Online, you can review it, adjust it, or delete it according to your needs.
Next, we’ll take a look into how to accomplish these same goals in QuickBooks Online’s older, but just as valuable brother: QuickBooks Desktop.
How to Record and Match Bank Deposits on QuickBooks Desktop
Starting the deposit recording process on QuickBooks Desktop is quite similar to starting it on QuickBooks Online. First, you’ll need to organize all of those cash and check transactions into the Undeposited Funds Account. From there, however, the process becomes a bit different.
In fact, the rest of the process on QBD is essentially the reverse of the process on QBO. The next step on your QuickBooks Desktop application is to go from your homepage to the “Record Deposits / Make Deposits” page. From there, in the “Payments to Deposit” window, select each payment you just deposited at the bank. Finally, in the “Deposit to” drop-down menu, select the bank account you want to deposit the funds into.
From there, you can check the amounts, add bank charges, write a memo, and complete the process. Again, it’s imperative that you ensure the amounts are correct and that you’re depositing the funds into the right account.
Just like in QuickBooks Online, you can review, adjust, and delete past deposits. QuickBooks makes it super easy to manage your cash and check payments so that nothing slips through the cracks. You can relax knowing that your finances are recorded quickly and accurately, and focus on running the business itself.
