Receiving Payments and Making Deposits in QuickBooks

Receiving Payments in QuickBooks

When a customer pays you, you need to record the payment in QuickBooks to keep your books up-to-date and accurate. Here's how to receive payments in QuickBooks:

• Go to the Customers menu and select Receive Payment.
• Select the customer from the list and enter the amount paid.
• Choose the invoice(s) the payment should be applied to.
• Select the payment method (cash, check, credit card, etc.).
• Enter the payment date and memo (optional).
• Click Save & Close to record the payment.

If the payment doesn't match an open invoice, you can record it as an undeposited fund. This allows you to hold onto the payment until you're ready to make a bank deposit.

To Record a payment as an undeposited fund In QuickBooks:

• In the Receive Payment window, select the Undeposited Funds option from the Deposit to dropdown.
• Enter the payment details as you normally would.
• Click Save & Close to record the payment in Undeposited Funds.

Later, when you're ready to make a deposit, you can select the payments you want to include from Undeposited Funds.

How to Make Deposits in QuickBooks?

When you deposit money at the bank, you often deposit multiple payments from different sources at once. The bank usually records everything as a single record with one total. If you enter the same payments as separate records in QuickBooks, they may not match how your bank records the deposit.

In QuickBooks, you can combine multiple payments into a single deposit to match your real-life bank deposits. Here's how to record a bank deposit:

• Put the payments you want to combine into the Undeposited Funds account.
• Go to the Banking menu and select Make Deposits.
• In the Payments to Deposit window, select the payments you want to include.
• Click OK.
• In the Make Deposits window, select the account you want to deposit into from the Deposit to dropdown.
• Verify the deposit total matches your bank deposit slip.
• Enter the deposit date.
• Add a memo if needed.
• Click Save & Close to record the deposit.

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

If you regularly make the same deposits, you can memorize the deposit to make it a recurring transaction:

• Go to the Banking menu and select Use Register.
• Find and open an existing deposit.
• Right-click the deposit and select Memorize Deposit.
• Select Automate Transaction Entry if you want QuickBooks to record the deposit automatically.
• Set the frequency, start date, number of deposits, and days in advance.
• Click OK to save the recurring deposit.

QuickBooks will automatically record the deposit on the date and frequency you choose.

Applying Payments to Invoices In QuickBooks

When a customer pays an invoice, you need to apply the payment to the correct invoice. This keeps your accounts receivable accurate and shows the invoice as paid.

To apply a payment to an invoice:

• Go to the Customers menu and select Receive Payment.
• Select the customer and enter the payment amount.
• In the Outstanding Transactions section, select the invoice(s) to apply the payment to.
• QuickBooks will automatically apply the payment to the oldest invoice first.
• If the payment doesn't fully cover the invoice, the invoice will show as partially paid.
• Click Save & Close to record the payment and update the invoice status.

If you receive a partial payment, you can still apply it to the invoice. The invoice will show as partially paid until you receive the full amount.

If a customer overpays, you can apply the excess amount to a new invoice or record it as a credit for future invoices.

How to Receive the Payment in QuickBooks

• Go to the menu of Plus Sign and then under the Customers select Receive Payment, after that choose the customer who has made the payment to you from the customer field
• Get the name of the customer added
• Then add the date when you receive the payment
• After that, get the method of payment entered
• Then for the Reference Number, get the check number entered

Mistakes Made while Depositing or Receiving the Payments

Let’s have a look at the common errors made while payments are received or deposited.

1. Error One: Recording the Customer Payments directly in the Bank Account and not in Undeposited Funds

This error can be resolved, by following the remedies given below:

• Get the Use Undeposited Funds cleared, from the default deposit account, to get the drop-down list of Deposit, displayed in the window of receiving payments
• Make sure that original payments are edited in the window of Receive Payments
• Now from the drop-down list of Deposit, choose Undeposited Funds
• Now from the Undeposited Funds, group the payments in the window of Record Deposits, to match them with the actual bank deposits.

2. Error Two: Overlooking the Undeposited Funds when Deposits were made

If your Undeposited Funds have a large balance, then you may have used the Received Payments and the record receipts as well to the account of Undeposited Funds and after that have added the same payments in the form of deposits in your account register, in the window of Record Deposits.

This will lead to the payment being recorded twice, which will overstate the assets and income.

A. Method One: Individually correcting each Deposit

• Search for original duplicate deposits in QuickBooks
• Then go to Make Deposits and get the erroneous deposit deleted
• After that tap on the window of Record Deposits and get the correct deposit added from the undeposited funds

B. Method Two: If in case there is an involvement of loss of transactions then you can create the zero-sum entry.

• Make use of the window of Record Deposits, to get the payment selected, which is present in the account of undeposited funds
• Get the additional line added, to highlight or indicate that the income account, is overstated, and then get the negative number entered for that portion of the deposit that is attributable to the current year
• Get another line added, if required for the portion attributable for the previous years, from the drop-down list, choose Retained Earnings, and get the negative number entered for the balance

3. Error Three: Credits or Payments which are not applied against the invoices

This error can be resolved easily. All you have to do is follow the remedial steps suggested below:

• Run the report of Open Invoices, to find the unapplied credits. Report preferences could be set by you, so that negative numbers get reflected in the color red and within the parentheses, to ensure that they are spotted easily
• After you have identified which customers have the unapplied credits, go to the window of Receive Payments and make use of it, to get the credits applied to the specific invoices.

In summary, QuickBooks makes it easy to record payments from customers and deposits to your bank account. By following a few simple steps, you can keep your accounts receivable up-to-date and your books in balance. The reporting tools allow you to analyze your payment data and ensure your records match your bank statements.