What is the difference between payment and deposit in QuickBooks

Deposits in QuickBooks can be removed using the Make Deposits window. When removing the deposit, the payment is removed as well if you are using the Undeposited Funds account. If you plan to deposit the funds at a later time, you must also recreate the original payment. If you are not using the Undeposited Funds account and plan to make the deposit later, you can leave the original payment for the deposit intact. Otherwise, you must be sure to manually delete the payment as well.

1. 1.

   Click the "Record Deposits" icon on the QuickBooks homepage, or click the "Banking" menu and select "Make Deposits."

2. 2.

   Click "Cancel" if the Payments to Deposit window opens.

3. 3.

   Click "Previous" to move through the transactions until you find the deposit or payment from a deposit that you want to remove.

   I have a lot of respect for the developers who have designed QuickBooks to make it easy for users not just to record customer payments but to deposit checks and reconcile our bank statements.

   Let's take a look at a common sequence of events when we receive a customer check. We record the customer payment to an invoice and set the check aside until it is convenient to run to the bank, which might not be today. Sometimes, we get another customer payment in before we have made it to the bank. We record that payment and now have multiple checks to deposit.

   QuickBooks allows us to post customer payments to a holding account called "undeposited funds," which is another term for our desk drawer. When we are ready to run to the bank, we select "Record Deposits" and let QuickBooks do the additions if multiple checks are involved, print a deposit slip for the total to be deposited, and record the transfer from undeposited funds to our bank account. This assures that we do not count checks in our drawer as deposited in our bank account until we actually deposit the checks. It also assures that our deposit date and amount will match the amounts on our bank statements, which makes bank reconciliations easier.

   Let's look at how QuickBooks handles this process. When receiving customer payments, the normal "Deposit to:" account should be set to "Undeposited Funds." Users can require that all payments are posted to undeposited funds by setting it in the company preferences for Sales & Customers. Below, I describe four common mistakes QuickBooks users make and how to fix them.

   4 common mistakes QuickBooks users make

   Error 1: Customer payments recorded directly to bank account instead of undeposited funds

   To correct this error:

   1. Clear the “Use Undeposited Funds" as a default deposit account so that the “Deposit to” drop-down list displays in the receive payments window.
   2. Edit the original payments in the “Receive Payments” window.
   3. Select “Undeposited Funds” from the “Deposit to” drop-down list.
   4. Group the payments from Undeposited Funds in the “Record Deposits” window to match the actual bank deposits.

   Error 2: Undeposited funds overlooked when making deposits

   If there is a large balance in undeposited funds, the user may have used “Receive Payments” and recorded receipts to the “Undeposited funds” account, and then entered the same payments as deposits in the account register or in the “Record Deposits” window. As a result, payments are recorded twice, which overstates income and assets.

   More articles from AllBusiness.com:

   • Here’s Why Home Insurance Will Not Properly Insure Your Home-Based Business [sponsored]
   • Should My Business Transition Employees to Direct Deposit?
   • What Is a Balance Sheet and How Can It Help Your Business?
   • Guide to Bookkeeping and Accounting
   • How to Avoid Chargebacks and Protect Your Small Business

   There are two methods to correct this mistake QuickBook users make:

   Method 1: Correct each deposit individually

   1. Find the original duplicate deposits in QuickBooks.
   2. In the “Make Deposits,” delete the erroneous deposits.
   3. Click “Record Deposits” window and add the correct deposits from undeposited funds.

   Method 2: If a lot of transactions are involved, a single zero-sum entry can be made

   1. Use the “Record Deposits” window to select all of the payments in the undeposited funds account.
   2. Add an additional line to indicate the income account that has been overstated and enter a negative number for the portion of the deposit attributable to the current year.
   3. Add another line if necessary for any portion attributable to prior years, select “Retained Earnings” from the account drop-down list, and enter a negative number for the balance.

   Error 3: Customer payments entered directly into a deposit

   If paid invoices still show up on a client’s open invoices report, they probably have not used the “Receive Payments” window to record the payments and apply them to the invoices. Instead, the client deposited the payments using the “Record Deposits” window, or entered them directly to the bank account register, naming an income accounting. As a result, the invoice remains open and income is overstated.

   There are two methods to correct this mistake QuickBook users make:

   Method 1: Replace the incorrect deposits

   1. Find the original deposits
   2. Delete the erroneous entries
   3. Re-enter the checks using the “Receive Payments” window and move the money into “Undeposited funds.”
   4. Assemble the payments back into the original deposits from the “Record Deposits” window.

   Method 2: Change the incorrect account on the deposit

   1. Change the accounts named in the original deposits to “Accounts Receivable.”
   2. Apply credits to the invoice using the “Receive Payments” window.

   Error 4: Payments or credits not applied against invoices

   Correction:

   1. Run the “Open Invoices” report to find unapplied credits. You can set the report preferences to show negative numbers in red and within parentheses to make them easy to spot.
   2. Once you have identified which customers have unapplied credits, you can use the “Receive Payments” window to apply the credits to specific invoices.

   RELATED: 7 Quick Tips to Get Your Small Business Finances in Order

   Robert Guild is certified QuickBooks ProAdvisor in Austin, TX, who conducts CPE courses for CPAs and individual training and group classes to QuickBooks users.

   I have a lot of respect for the developers who have designed QuickBooks to make it easy for users not just to record customer payments but to deposit checks and reconcile our bank statements.

   Let's take a look at a common sequence of events when we receive a customer check. We record the customer payment to an invoice and set the check aside until it is convenient to run to the bank, which might not be today. Sometimes, we get another customer payment in before we have made it to the bank. We record that payment and now have multiple checks to deposit.

   QuickBooks allows us to post customer payments to a holding account called "undeposited funds," which is another term for our desk drawer. When we are ready to run to the bank, we select "Record Deposits" and let QuickBooks do the additions if multiple checks are involved, print a deposit slip for the total to be deposited, and record the transfer from undeposited funds to our bank account. This assures that we do not count checks in our drawer as deposited in our bank account until we actually deposit the checks. It also assures that our deposit date and amount will match the amounts on our bank statements, which makes bank reconciliations easier.

   Let's look at how QuickBooks handles this process. When receiving customer payments, the normal "Deposit to:" account should be set to "Undeposited Funds." Users can require that all payments are posted to undeposited funds by setting it in the company preferences for Sales & Customers. Below, I describe four common mistakes QuickBooks users make and how to fix them.

   4 common mistakes QuickBooks users make

   Error 1: Customer payments recorded directly to bank account instead of undeposited funds

   To correct this error:

   1. Clear the “Use Undeposited Funds" as a default deposit account so that the “Deposit to” drop-down list displays in the receive payments window.
   2. Edit the original payments in the “Receive Payments” window.
   3. Select “Undeposited Funds” from the “Deposit to” drop-down list.
   4. Group the payments from Undeposited Funds in the “Record Deposits” window to match the actual bank deposits.

   Error 2: Undeposited funds overlooked when making deposits

   If there is a large balance in undeposited funds, the user may have used “Receive Payments” and recorded receipts to the “Undeposited funds” account, and then entered the same payments as deposits in the account register or in the “Record Deposits” window. As a result, payments are recorded twice, which overstates income and assets.

   More articles from AllBusiness.com:

   • Here’s Why Home Insurance Will Not Properly Insure Your Home-Based Business [sponsored]
   • Should My Business Transition Employees to Direct Deposit?
   • What Is a Balance Sheet and How Can It Help Your Business?
   • Guide to Bookkeeping and Accounting
   • How to Avoid Chargebacks and Protect Your Small Business

   There are two methods to correct this mistake QuickBook users make:

   Method 1: Correct each deposit individually

   1. Find the original duplicate deposits in QuickBooks.
   2. In the “Make Deposits,” delete the erroneous deposits.
   3. Click “Record Deposits” window and add the correct deposits from undeposited funds.

   Method 2: If a lot of transactions are involved, a single zero-sum entry can be made

   1. Use the “Record Deposits” window to select all of the payments in the undeposited funds account.
   2. Add an additional line to indicate the income account that has been overstated and enter a negative number for the portion of the deposit attributable to the current year.
   3. Add another line if necessary for any portion attributable to prior years, select “Retained Earnings” from the account drop-down list, and enter a negative number for the balance.

   Error 3: Customer payments entered directly into a deposit

   If paid invoices still show up on a client’s open invoices report, they probably have not used the “Receive Payments” window to record the payments and apply them to the invoices. Instead, the client deposited the payments using the “Record Deposits” window, or entered them directly to the bank account register, naming an income accounting. As a result, the invoice remains open and income is overstated.

   There are two methods to correct this mistake QuickBook users make:

   Method 1: Replace the incorrect deposits

   1. Find the original deposits
   2. Delete the erroneous entries
   3. Re-enter the checks using the “Receive Payments” window and move the money into “Undeposited funds.”
   4. Assemble the payments back into the original deposits from the “Record Deposits” window.

   Method 2: Change the incorrect account on the deposit

   1. Change the accounts named in the original deposits to “Accounts Receivable.”
   2. Apply credits to the invoice using the “Receive Payments” window.

   Error 4: Payments or credits not applied against invoices

   Correction:

   1. Run the “Open Invoices” report to find unapplied credits. You can set the report preferences to show negative numbers in red and within parentheses to make them easy to spot.
   2. Once you have identified which customers have unapplied credits, you can use the “Receive Payments” window to apply the credits to specific invoices.

   RELATED: 7 Quick Tips to Get Your Small Business Finances in Order

   Robert Guild is certified QuickBooks ProAdvisor in Austin, TX, who conducts CPE courses for CPAs and individual training and group classes to QuickBooks users.

   There’s been a lot of talk around quiet quitting. This is the trend where employees put in a minimal amount of effort just to get through the workday. Although this trend is disturbing, we need to take a look at some underlying factors that contribute.

   Nothing has been the same since Covid. Lives have changed, working situations have changed, and we all interact differently. I understand this as a wife, mother, and CEO. As a result, we need to approach things differently. We’ll get into the reasons why quiet quitting is worse than just quitting. I believe that it means people are struggling to find meaning in their work.

   The power of purpose

   We’re at a point where work has lost meaning. People are tired of being someone at work they’re not. This trend is not only hurting the workplace, it’s making all of us more aware of why the “traditional” workplace has never worked. All of us want to be passionate and engaged in what we do each day to earn a living. For me, this has been my entrepreneurship, my kids, and my work on Instagram—my passions. But for many, they aren’t passionate about what they do in the workplace. Quiet quitting means that workers are lacking in enthusiasm, which points to the silver lining of the pandemic: people are starting to choose what they want to do.

   Quiet quitting didn’t become a movement in the workplace until 2020. What is important about the quiet quitting trend is that it’s waking all of us up to an economic situation in which many are forced to take jobs just to make ends meet, and to an economic climate that makes it more challenging than ever for people make a living doing what they love. To break the pattern of quiet quitting, this is the time to follow your passion so that you’re not just showing up somewhere to make a buck.

   We choose how we withdraw

   You’ve probably had an experience where you’re done with a job or relationship. You step out of that situation in your own way. There’s nothing wrong with that! But know that if you see yourself checking out of your job or a relationship, that’s a sign for you. Something must be done, and if you can’t do it right now, begin to make a plan. If your day-to-day is not engaging you, you’re not valuing what is engaging you. And if you’re a leader who sees your employees checking out, this is a great opportunity for you to step back and reframe.

   If you’re an employer, you may be more willing to hire a quiet quitter. I get it. The labor market has not been kind. But for employers, that means we need to step up our game by focusing on two things:

   • Building a culture that makes people want to stay
   • Hiring based on character

   It’s not easy, but those who are hiring are looking for character. Those who are being hired based on character are looking for a culture that nurtures who they are.

   Quiet quitting is the new norm

   Quiet quitting isn’t just appearing in the working environment, it’s also showing up in relationships. People can quietly check out of any kind of relationship, whether personal or business. And to put this trend fully into context, quiet firing is also occurring. When a situation is unrewarding, “checking out” can go both ways.

   “Quiet quitting” is a term coined by Bryan Creely, a corporate recruiter turned into a coach. His phrase was released to TikTok and YouTube in 2020, but there’s an earlier reference to the term by the economist Mark Boldger in 2009. A 2021 movement in China called the concept “lying flat.” Gallup has associated this trend with 50% of the U.S. working force. So why is it so popular?

   In any working environment, some are super engaged, others are detached, and the rest are quiet quitters. They’re sticking around because they need to but aren’t all in. Although this trend might seem strange, you likely understand because you’ve felt this way or know someone else who does. It’s not strange; in fact, it’s sadly normal.

   Breaking the cycle by finding meaning

   As an entrepreneur, I hold a leadership position. I have realized that those who work for me need to feel the passion that I feel in order to stay engaged. The last few years have led us all to disconnect. The job market may be uncertain, but the solution to quiet quitting is to feel involved and passionate about what we do. Our professional lives need to meet our personal lives to be sustainable. We may have to work, but we should work where our hearts are. This may seem like a luxury for many, but it is worth the time to see where your heart is and follow it to a place where you can make money.

   Layoffs are happening, and at the worst time possible. I invite you to realize that if you were laid off recently, maybe it’s because you were quietly quitting—and for good reason! Maybe you’re tired of the grind and looking for work that has meaning. If you’re a leader or entrepreneur, it might be time to understand the culture that you’re creating and how it makes your employees feel. More than ever before, we must lift each other up and give our work meaning. Work can be unpleasant or it can be something to look forward to.

   To end the cycle of quiet quitting, find that thing that fills you with passion. Don’t show up and do the minimum. Find what you love and pour your whole heart into it. Get out there and trust in your conviction. Whatever is calling to you can become your life! And if you’re an employer, strive to make your employees feel happy, taken care of, and in a space they can commit themselves to.

   What is the difference between payment and deposit?

   What is the difference between Payment and Deposit on the Cash/Check Payment window? The difference is that a payment doesn't hit the GL until the invoice is posted whereas a deposit hits the GL as soon as the deposit is saved.

   What is the difference between paid and deposited in QuickBooks?

   Invoices will go through as paid but not deposited when the payments are recorded under the Undeposited Funds. To update the status to Deposited, you need to transfer the funds from the undeposited funds to your bank account through Bank Deposit.

   When would you use a deposit transaction in QuickBooks?

   The Bank Deposit feature serves two functions:.

   If payments are received into the Undeposited Funds account, you can group payments and deposit them as a single record into an account..

   The ability to record items that aren't typically captured on invoices or bills, such as assets and loans..