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Cash and Check Deposits

You can reconcile your bank statements more easily IF you group your cash & check payments into deposits the same way the bank groups them together.

When you enter Sales Receipts or Receive Payments on Invoices, be sure to enter the correct Payment Date and whether it was paid by C(ash) or Ch(eck).

Some QuickBooks users don’t realize when they receive Payment(s) on their Customer Invoices using QB 2004 or earlier, the payments received may be: 1) deposited directly into a bank account OR 2) deposited into “Undeposited Funds,” like sitting in your desk drawer waiting for you to take to the bank.  QB 2005-06 automatically place all monies received into “Undeposited Funds.”  This is a good thing and the best way to handle it.

You want to group your undeposited funds together exactly the way you take them to the bank.  Click on Banking, Make Deposit, and checkmark each & every Cash & Check payment you are ready to deposit into the bank.  Click OK, make sure that the checking acct is correct, the date is correct, & overwrite the word “Deposit” with “Ck & the number of  payments included in this deposit.  Make sure all payments from Undeposited Funds are listed.  Click “Save & Close” or “Save & New” to enter another deposit.  You may print a “deposit summary” to attach to your deposit slip.   Click on Print (at the top of the deposit window).  Print the deposit summary on plain paper OR print the deposit slip if you have printable blank deposit slips.

Sometimes, you will NOT deposit the cash in the bank.  Create a bank account named Petty Cash.  Deposit any cash you receive that you don’t deposit into your bank account into your Petty Cash account.  If you put some of the cash in the bank and some into Petty Cash, you may need some help setting it up.

When you reconcile your next bank statement, make sure that your QB deposits match those on your bank statement.  If they do match, congratulations.  If they do not match, re-examine how the grouping in QuickBooks differs from the bank statement, and make the proper adjustments.

4 comments to Cash and Check Deposits

  • Thank you for this information. Although I do not currently have QB, I will consider the advantages of having it to keep track of my accounts. The information you provide here thought is still helpful for me to keep track of what I am depositing for cash or checks! Thanks, Jamie

  • McKenzie

    I work at an insurance agency and we take customer payments (cash) and then we take that money and put it into an account where the insurance companies sweep that money out the customer payment is not our source of income what would be the best way to record these cash deposits without putting each customer into quick books and their payment amount

    • QBQueen

      McKenzie-

      I would setup a new bank account named CASH CLEARING, and setup a new Current Liability account named Customer Insurance Payments.

      You can probably use the name “CUSTOMER” for all your customers in QuickBooks (as long as you have the Customer’s real name in your insurance software).

      Deposit the cash monies in the CASH CLEARING bank acct from “CUSTOMER” using the Account/Category of “Customer Insurance Payments.”

      Whenever the insurance companies sweep the monies out, enter a check with no number, use “E” for everything electronic, ant the $-Amount that was taken, with the same Account/Category of “Customer Insurance Payments.” Both you CASH CLEARING and Customer Insurance Payments accts will keep returning to “ZERO.”

      Hope this helps. Call me at 909-949-4930 if you want further assistance.

  • QBQueen

    Intuit only requires you to upgrade once every three years. I think that is very reasonable especially since you can buy QuickBooks Pro for about $140 on Amazon. That comes to less than $50 per year for a great bookkeeping program. Hard to beat that.

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