How to match bank deposit transactions in QuickBooks Online

The most common error I see is duplicate transactions in QuickBooks.  This week’s video walks through the steps to record sales and invoices in QuickBooks, and then to match the deposits to invoices and bank transactions on the bank feed.

If you follow through the steps your bank balance and sales will be accurate.  If not, your sales will likely be overstated, and your bank balance incorrect!

Follow these steps:

At the time of the sale

  • Is the customer paying me immediately?

Use a sales receipt

  • Will the customer pay later?

Use an invoice.

Entering a Sales Receipt

  • Enter the customer information, date and payment method.
  • Will the amount received appear separately in the bank? If so, select the account it will be deposited to.
  • If not, use undeposited funds.
  • Enter the items sold, price, any taxes
  • Save and close
  • Match the subsequent deposit on the bank feed to the sales receipt

Entering an Invoice

  • Enter the customer and product details, give or send the invoice to the customer.
  • Match the bank feed amount to the invoice in order to “close” the invoice
  • Or enter the payment using “Receive payment”
  • Match the deposit on the bank feed to the payment (not the invoice).

Bank feed amount not previously recorded

  • Be absolutely sure you have not recorded the sale or deposit any other way.
  • Click anywhere on the row in the bank feed to “open” it, enter the Customer name, and the category you would like the income to go to. Select Add

Reconcile your bank account

  • This is the ultimate check – if the bank is reconcilied, without unreconciled items carried over then your bank balance will be correct

Run your Accounts Receivable report

  • Ensure that all of the amounts showing on the report are accurate. If you think that someone has paid you – check, you may have added a sale, instead of matching to the invoice.

No more duplicated deposits!

 

Video transcript:

Hi, Kerry here from My Cloud Bookkeeping.

The number one reason people are reaching out to me for help is still because they have duplicated transactions. They’ve entered things twice from the bank feed. The bank balance compared to QuickBooks is way off, and the results are completely wrong.

I’ve addressed the matching of expenses from the bank feed in a previous video. The link is just there. So this time, I’m going to look at how to match deposits. There will be checklist download. You can grab it now and follow through or download it for later and use it so you know what you’re doing when I’m not around.

Because this is so common and so many of you have duplicated transactions, and it’s really messy to try to correct, I’m working on whether it’s going to be an eBook or a video course of something that I can provide so that you’ve got a way to step-by-step work through how to resolve it because it’s not always easy and it’s not always fun, quite frankly. But we’ll make it as fun as we can.

So be sure to subscribe. Join Facebook group, maybe. I don’t have many people on there. I don’t do a lot there. But find a way to keep track. And if you’ve got these duplicated transactions and you want to try to fix them by yourself, I’m going to try and find a way to help you to do that. So keep an eye out.  Hopefully, in the next week or so.

Right now, we’re in the middle of the corona virus so hopefully you’re watching this from the other end and thinking, oh, I’d forgotten about that but right now we’re in the middle of it so I’ve got lots of time to make new content, new videos. I’m going to say it at the end as well. Let me know if there’s anything else you want to know, let’s go and match some transactions on the bank feed.

Here we are in the sample company. I am going to walk through the sales process first, and show you what happens in your books when you record certain transactions.

Firstly, let’s consider if someone is paying here and now, or if you will be issuing an invoice and they will pay you later.

If you are receiving funds now, you use a Sales Receipt.

Enter your customer or choose your customer from the list. Check the date. Enter the payment method. So you pay by cheque. We’re putting it into the checking account and then we’ll sell them something. Let’s say he’s buying some entertainment for $480 with no tax. I don’t want to be messing around with tax right now. Okay? So now we save and close that.

Now, if we’re selling something to somebody who’d be paying later, we prepare an invoice. So we’ll pop to the invoice. Make sure we’ve got our customer, which is a different customer this time. Who would I choose? Here we go.

Once again, check the date, information. Choose what you’re selling. Choose something different this time.

I don’t know, Platinum Party maybe. $1,800. No sales tax. And then save and send. Now, of course, this one’s not going to send because we’re in a sample company. So we’ll just save it.

Now, the next step would be the payment from the customer. And here’s where it gets a little interesting. You can wait for the deposit to come into the bank and match it, which is what we’re going to do now. So now let’s go to the bank feed.

We can see here our sales receipt from Benjamin Yeung has matched perfectly with the amount that’s coming from the bank feed. So we’re going to match this right now.

Now, this amount here, the invoice for $1800 has come in. We can match this. That’s the payment for the invoice. So let’s go ahead and we’ll click match.

There’s also another way to do it. What we can do is we can unmatch this. Pop it back onto the bank feed. Here it is. And actually go and receive the payment from the customer first. So we’ll pop up to here. And we’ll say receive payment. Choose our customer. I’ve changed the date to coincide with bank feed dates. So if you’re noticing a date change, that’s what’s going on here. We’re going to select this invoice and we’re going to save and close.

So now we come back to the bank feed. Notice that this is matched to the payment and not to the invoice as it did before and this is correct. Now, occasionally, this is something that goes wrong. I think QuickBooks has fixed it now. But if you haven’t recorded a payment, it’s okay to match it to the invoice. If you have recorded a payment, you need to always match it to the payment. So because we know that this is the amount of the payment, it’s from the same customer, it’s correct, we’re just going to hit match.

Now, here we have a transaction deposit that doesn’t have a suggested match. And a common error I see is that somebody will look at this and they’ll go, “Oh I know who this is from.” And they’ll go, “Okay yeah, this was some sale.” Let’s have a look in here. Sales. Here it is and this is the right customer and they click add and they record the sale into their books. That’s fine if you hadn’t already recorded the sale somewhere else. So if you hadn’t recorded a sales receipt or an invoice. Various reasons why things might not match that I’ll go over later, but occasionally this is what happens.

So before we add anything, we’re going to pop in here and we’re going to go find match. And we’re going to see perhaps if we have already recorded it. But you know what? Perhaps, we know that this $8,760 here relates to a partial payment for this $15,000 for Chadha’s Consultants. If that’s the case, we can apply this $8,760 as a part payment and save it.

So by doing this, we’ve allocated that payment to the correct invoice. If we had added the $8,760 and not apply it to the invoice, we would have increased our sales by 8,760. And we would have thought that Chadha still owed us $15,000 and this is what goes wrong when you’re not really careful working with the bank feed.

Now, if you’re absolutely certain that a transaction on the bank feed has not been entered before, go ahead choose the category and add away.

Some of the reasons transactions may not match or if the amount is slightly different. Perhaps your customer didn’t pay the correct amount due to a sales tax error or a rounding error, maybe you recorded the transaction to the wrong bank account, and which is really easy to fix if you catch it. Also, if you have a backlog of transactions, sometimes I find the matching function doesn’t work so well. A really good reason to keep on top of your bank feed and your bookkeeping.

Now, if you have multiple transactions in one deposit, it doesn’t always correctly match them all and sometimes foreign currency amounts won’t much properly. So here’s where the importance of regular bank reconciliations really does come in. If you’re reconciling regularly, you’ll be able to catch this quickly.

So download the checklist, walk through it when you’re recording your transactions. I might make another video about combining multiple payments into one deposit using the Undeposited funds account. It seems to be another thing that people are having some challenges with. If that will be useful, let me know. Comment below. Join the Facebook group, whatever works for you.

Be sure to subscribe to my channel so I can keep you in the loop when I find a way to show you how to fix those duplicated transactions. It’s a little more work than a simple how-to video I’m afraid, but we’ll get there. If you have any questions, there is anything else you’d like to know, just reach out. Don’t hesitate to contact me. Comment below. My next video could be for you. Cheers!

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