QBO 4 - Recording deposit transactions

In which of these situations would you use the Add funds to this deposit grid?

A tax refund and cashback payment are perfect examples of money coming in that isn't matched to an existing payment. These need to be recorded as deposit transactions.

What if clients use deposit transactions to record sales in QuickBooks Online?

Although clients can do this, it's not ideal. They won't be tracking individual sales, which means they won't have meaningful information on their sales reports. Nor will the client be able to send their customers documentation such as invoices or sales receipts. However, this approach sometimes makes the most sense. For example, a medical practice that uses medical billing software to keep track of the accounts receivable, or an e-commerce store that doesn't connect to QuickBooks Online. Clients can also use the deposit transaction workflow with negative deposits, such as when customer refunds exceed the sales income for the day. ProAdvisor tip: Clients can add multiple funds to the same deposit. For example, they might include both customer payments and other funds in a single deposit.

How to record a negative deposit

Clients can also use a Bank deposit to record deposits of negative value. To explain this, let's look at an example. Here's a daily financial summary for a client with a retail business. As you can see, the client's gross sales were $135.00, but they paid out $229.00 in returns on the same day. Taking discounts into account, this resulted in total net sales of -$95.80.

Understanding deposit transactions

Deposit transactions can be used for any money coming into the business that isn't related to sales, and that needs to be recorded and categorized to the appropriate account on the chart of accounts. Clients can also use deposit transactions to record sales if they don't want to use the sales forms in QuickBooks Online.

How can the client record this figure?

Even though the total sales figure is less than $0.00, the client can record it as a deposit. They should enter the transaction details as shown below, leading to a net value of -$95.80.

When would a client use deposit transactions?

Here are some cases when clients would use deposit transactions: ** The client receives funds from loan proceeds or contributions of cash from owners ** The client receives a refund from a vendor and wants to record it directly against the associated expense account ** The client receives a refund from a tax agency and needs to record it to reduce the Tax Liability or Expense account ** An employee reimburses the client's company, and the client needs to record the reimbursement against the Employee Loan receivable account ** The client doesn't record income using sales transactions (invoices or sales receipts) and wants to record deposits directly to income accounts

Recording a deposit transaction

Let's see how to record a deposit transaction for a bank loan. 1.) Select + New, then select Bank deposit 2.) Specify the Account, and set the Date 3.) Select the Add funds to deposit grid 4.) In the Received From column, enter where the payment is from. In our case, it's from a bank 5.) Next, select the right account in the Account column. In our case, it's SBA Loan Payable. This is a liability account, so QuickBooks Online won't classify it as income 6.) Add the description if necessary 7.) Then enter the Payment Method, the payment's Reference Number, and the Amount 8.) Finally, select Save and close

What happens in the bank feed?

The client will have recorded the net payment figure of -$95.80 with their bank. When this transaction downloads into the For review tab of the associated bank feed, QuickBooks Online flags it as a potential match with the deposit transaction that the client previously recorded. Note that because the deposit was negative, it appears in the Spent column rather than the Received column, unlike most deposits. The client can then accept—or not—the suggested match, as usual.