How to receive and deposit payments in quickbooks

In this tutorial, we will see whether how we can receive and deposit payments in quickbooks desktop.

Well in the last tutorial, we created our invoice and send it to our fictional customer named “kristie”. And upon receiving the invoice, she forwarded us a check for the due amount. Now we have received the check and need to record it in quickbooks desktop.

Tutorial Instructions:

 

 

First let me show you the due amount, and here is the due amount we created our invoice against in the last tutorial and when we go to the chart of account, it also shows the exact balance under “Accounts Receivables”.

Now, just click on the receive payment on the home page to go to the Customer payment  window….here as soon as you will select your customer in the “Received From” field, it will show all the invoices concerning that customer and since we have just one at this point in time, its showing that. Now, select the method your customer choose to pay you with whether its cash, credit card, e-check or check etc. then write the check number.

Well, either you can write your amount in the “Payment amount” field or you can just select the invoice here and if you won’t write the amount in the “Payment amount” field it will automatically fill that field with the invoice or invoices amount you select.

Well lets say, your customer paid you a portion of that amount like 500 out of 700 then the quickbooks apply that amount to the invoice and will inform you about the remaining balance of the invoice here in this box Where you will have two options…like keep it as under-payment or just write off the balance which I don’t want. Anyhow, exactly the same way if the customer pays more than the invoice that it will show the credit balance in this box.

Anyhow, instead of writing under or over payment I am adding the full amount to keep it simple at this point in time and I will talk about those variation in future. Now change the date you received your payment on and since I am not giving any discount and/or credit on this purchase, I am not adding them to this invoice like I said these variations will be discussed in future tutorials.

Anyhow, here on the right side the quickbooks is giving you the summery of this payment whether what payment was applied and what was the discounts or credit etc on this invoice and since there was no discounts and credits have been provided on this invoice its showing that the full payment has been received.

Now Just write your memo if you want or just click on “Save and Close” button to record that payment. Now the payment has been recorded and here you can see that the quickbooks is informing that you have a check to deposit into your bank account. Now, go to your chart of account to see whether what changes has taken place there and here you can see that it has taken the amount from “Accounts Receivables” balance and placed it into the “Undeposited Funds” Account.

Well till this point what quickbooks considers is that you have received your payment but you still have to go to your bank to deposit it into your bank account and till that point it will keep showing the balance into “Undeposited funds” account.

So in a way “Undeposited funds” account is a clearing account that will keep showing the balance until the received amount hasn’t been deposited into your bank account. Well sometimes you don’t deposit your received payment checks, instead you endorse them to make your own payments to your vendors. Well in that senior that check never hits your bank account, in  that case, the transaction will be treated differently which is an advance level topic and we will cover that in future tutorials.

 

Now, lets deposit the check into the bank account, Just click on “Record Deposit” under banking section it will open the record deposit window alongwith the window of all the checks you need to deposit into your bank account. Well since I have only one at this point in time, its showing that.

Anyhow, lets say when you open the “Record deposit” window it won’t open this small window with it then just click on “Payments” it will open that window and then just select the ones you want to deposit and click on OK. It will add the selected ones here and then change your bank account in the “Deposit to” field and date you made that deposit on moreover you can write some memo here if you want and here you can see that its taking the amount from “Undeposited Funds” and putting it into our bank account.

And since I am not taking any cash back I am keeping these fields empty and then just click on “Save and Close” button to record that deposit. Now, our deposit has been recorded and lets go the chart of account to see the changes and here you can see that the amount from Undeposited funds has been transferred to our bank account.

And when you will double click on it, it will open the bank register where you will be able to see the transaction and the total balance of that bank account and when you will go to the customer center to see the “Kristie’s” balance, it will show the “zero” balance as the check against the invoice has not-only been received but-also cleared.

Now our first payment has been received and deposited into our bank account.