Last week we talked about how easy it is to Invoice your customers and record sales with QuickBooks. Today I’ll explain the easy way to deposit all that money you just made.
Customer payments and deposits are very easy to record with QuickBooks. If your receiving the payment at the time of the sales you use the Sales Receipt. If you are invoicing your customers and clients, and not receiving payments till later you will use the Receive Payments Window. By using this method you can match up the payments with the invoices that were paid, which updates your accounts receivable account.
APPLYING PAYMENTS
Recording a full payment to a single or multiple invoices
- open the receive payments window
- select the customer…once the customer is selected you will see all open invoices on their account
- enter the $ amount paid in the amount field
- select the payment method
- payment will be applied to the open invoices using the oldest invoice first, you can change how the payment is applied by clicking un-apply payment and then apply the payment manually yourself by selecting the invoices.
- click save and new to enter the next payment or save and close
QuickBooks records the payment to the Undeposited Funds account, and reduces the customers accounts receivable (amount owed) balance.
A partial payment from a customer is entered the same way. After you’ve applied the payment to the invoice just make sure you leave the “Leave this as an underpayment” option selected.
If a customer overpays you will apply the payment as usual and then have the option to either leave the payment as a credit or refund the customer. If you elect to refund the customer a new window will open. In the issue refund window click ok and a check for the customer will be added to your checks to be printed or you can make a payment to them online.
If the customer is prepaying on their account, deposit the amount the same way and click the “Leave payment as a credit” option. This will leave a credit amount on the customers account and then when you invoice the customer you can apply that credit. You’ll use the create invoice window as we discussed previously in the Invoicing with QuickBooks post. After you have created the invoice, click on “apply credits”
Click yes to any message and QuickBooks will open the “Apply credits” window, which will show the credit you entered earlier for the customer. Click that you want to apply this credit to the invoice. The amount will show up on the invoice and reduce the balance due. Click save and close and the transaction is recorded.
MAKING DEPOSITS
Whenever you use a sales receipt to record a sale or use the receive payments window, QuickBooks keeps track of that money for you. You can elect to have the money deposit directly to your checking account or you can have the money posted to the “Undeposited Funds” account until you are ready to make a deposit. This might be a good option so that you can easily balance the funds you’ve received with the deposit your going to make to the bank. Also when you receive your bank statement it will be easier to reconcile since the deposited amounts will be seen as one number instead of numerous amounts scattered throughout your check register.
To always have your payments directly posted to the “Undeposited Funds” account, set the default deposit account in Sales and Customer Preferences to always deposit to the undeposited funds account. This way you will never have to remember to choose that option when in the receive payments window. It will automatically do it for you.
When you’re ready to go the bank, you can select the payments to be deposited, record the deposit and print a deposit slip all from the “Make Deposits” window on the banking menu.
- From the Banking menu, select Make Deposits-you will see all the payments you recorded that have not yet been deposited.
- Select the payments you want to deposit, click OK and you’ll now see the “Make Deposits” window showing the payments you just selected.
- In the Deposit to Field, choose the account that you are depositing too.
- If you want to print a deposit slip click print
- Save and close to the record the deposit.
You can also use the “Make Deposits” window to record miscellaneous deposits. For example, say you receive a refund from your insurance company for overpayment. You would record the deposit using the same window you did above. Then enter the account number you want to credit for the refund, in this example it might be insurance expense, and the amount of the refund that you are depositing. Again print out a deposit slip if you want and click save and close.
Thanks for reading and have a great weekend!
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