Always keep in mind that your goal when recording a bank deposit in QuickBooks is to match what you record to what you actually deposit. That means matching the transaction date, the amount, and the bank account to which you make the deposit.
The steps to make a bank deposit in QuickBooks depend on your setting of the Undeposited Funds preference.
For most QuickBooks users, the Undeposited Funds preference is enabled, so we’ll cover that scenario first.
Enabling the Undeposited Funds preference means that your default “deposit to” account is your Undeposited Funds account. Customer payments and sales receipts are temporarily accumulated in the Undeposited Funds account until you combine them into one or more bank deposits. Funds reach the Undeposited Funds account in one of 3 ways:
- recording a customer payment on the Customers->Receive Payments menu selection
- recording a Sales Receipt
- recording a General Journal entry
Funds in the Undeposited Funds account are combined into a bank deposit on the Banking->Make Deposits menu selection. If you select this menu choice and your Undeposited Funds account contains transactions, QuickBooks will automatically open the Payments to Deposit window, as shown nearby.
This window will contain all items available to deposit. In this window, choose the item(s) that actually make up the bank deposit being recorded. In our example, we chose 1 item. Buttons are available to Select All items and Select None, which performs an “undo” function. When you’ve selected the item(s) to deposit, click Ok to return to the Make Deposits window. If you want to change the items selected from among the available items to deposit, simply hit the Payments button at the top of the Make Deposits window. If your deposit will only contain items from the Undeposited Funds account, it’s a good idea to verify that the Payments Subtotal matches the amount of the deposit.
In addition to items gathered from Undeposited Funds, you can include other deposit items, as well as deductions for fees, such as incoming wire fees. You always want to have the amount of the deposit match the amount recorded by the bank. If your bank combines a fee with a gross deposit and records a net deposit amount, you’ll want to include the fee on the Make Deposits window. If your bank records a gross deposit and a fee as 2 separate transactions, you don’t want to include the fee on this window. In our example, even though we’re depositing 1 check, we’ve added a $10 bank service charge expense to demonstrate how a deposit deduction is recorded.
You can also receive cash back from a deposit, which will be deducted from the deposit. You should only use this feature if your bank reports the net amount of the deposit as 1 transaction. If you use these fields, you’d normally enter a petty cash account (effectively a transfer), an expense account (such as a travel advance), or an equity account (a return of equity). While recording cash back from a deposit on the Make Deposits window can save a step, we generally discourage using this method. It’s preferable to record the gross deposit and cash withdrawal separately because you’ll preserve more transaction details of the cash withdrawal by doing so.
Before saving the deposit, confirm the Deposit To account, the transaction Date, and the Deposit Total match your actual bank activity. Optionally, you can record a Memo for the deposit.
Once you’ve verified the deposit details, click the Save icon, the Save & Close, or Save & New button.
You can also print a Deposit Slip and a Deposit Summary from the Print icon. If you opt to print information associated with the deposit, QuickBooks will first save it. A Deposit Summary is simply a summary report of the items and cash back (if any) on the deposit.
A Deposit Slip is designed to work with pre-printed QuickBooks deposit slips to automate the step of filling out a deposit slip form before you take the deposit to the bank. However, using a pre-printed deposit slip imposes some restrictions on the deposit function: all deposit items must have a Cash or Check payment method, and every deposit item must have a positive amount. The screen shots below illustrate these restrictions.
Recording a deposit if you don’t use the Undeposited Funds account follows most of the procedures described above. If you previously had the Undeposited Funds preference enabled and disable it while you have items in the Undeposited Funds account, QuickBooks will automatically open the Payments To Deposit window. If there are no transactions in the Undeposited Funds account, QuickBooks will present the Make Deposits window and allow you to manually enter the items for a deposit.
For each deposit item, you’ll specify who provided the funds (Received From), the general ledger account (From Account), any applicable Memo, the Chk No., the payment method (Pmt Meth.), and Amount. If class tracking is enabled, you’ll be able to specify the Class for each deposit item as well.
Once you’ve verified the deposit details, click the Save icon, the Save & Close, or Save & New button.
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