 QuickBooks Online 2024. Bank feeds matching sales receipt to bank feed deposit. Get ready and some coffee because we don't just do data input. We get totally into it. With intuits. QuickBooks Online 2024. First a word from our sponsor. Yeah, actually we're sponsoring ourselves on this one because apparently the merchandisers they don't want to be seen with us. But that's okay whatever because our merchandise is better than their stupid stuff anyways. Like our trust me, I'm an accountant product line. It's paramount that you let people know that you're an accountant because apparently we're among the only ones equipped with the number crunching skills to answer society's current deep complex and nuanced questions. If you would like a commercial free experience consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com. Here we are in our QuickBooks Online bank feed practice file we set up in a prior presentation. Let's open up the major financial statement reports like we do every time the reports on the left hand side within the favorites. We're going to right click on that balance sheet to open a link in a new tab or right click the profit and loss otherwise known as the income statement to open a link in a new tab and do the same with the trustee TV. The trial balance. If you don't have that trial balance in the favorites, you could search for it. Let's tap to the right. Close that hamburger. Put the bun on the burger. Change the range. We're going from 010124 tab to 033124 first three months of 2024. I'd like to see each month broken out months side by side running to refresh it. Let's tap to the right. Close the hamburger on the profit and loss and then change the range 010124 tab 033124 tab and let's go to the months and then run it to refresh that one and then tab to the right. Close the hamburger on the trial balance and then change the range 010124 tab 033124 tab. Select the drop down and see the months and then let's run it. Let's go back to the balance sheet. This time we're going to be thinking about the matching process once again in a little bit more complex of a system, but still a cash based one where we have a sales receipt. To consider that, let's jump on over to the desktop flow chart that we're using for QuickBooks online purposes because we're just looking at the flow of the forms, looking at the sales cycle or revenue cycle or accounts receivable cycle, whatever you want to call it, noting that we're going to have to follow whatever the standard convention is of our industry. If we had a really easy system like your YouTuber or something, you could just wait till the stuff clears the bank recording the income with the use of the bank feeds on a deposit form. However, if you're in a situation where you're at a cash register, that might not be the best way to go. You might have to then record the information as you make the sales, put that into undeposited funds and then deposit matching the deposit to the bank feeds. And in prior presentations, we've looked at the accrual method, in which case we have to build the client. So that's not going to be something that can be done with the bank feed. We're going to have to send out the invoice, which will increase accounts receivable, and then we'll have to collect on that in some way, shape or form. So here we're focusing in on the sales receipts. So we can imagine we're at a cash register situation, and there's two kind of primary ways you can deal with a cash-based system of this kind. One is you could try to do the easy thing to just rely on the bank feeds. You could say, I'm just going to make sales during the day. I'm going to take the money that I get. I'm going to deposit it into the checking account at the end of the night, or I'm going to let the whatever financial transactions take place for the credit card or the electronic transfers, let them hit the bank, and then when they hit the bank, I'll just record them as income using the bank feeds. That's one way that you could do it. Now you're losing a lot of internal controls doing it that way, which you might want to put in place when you're talking about a system where you're at a cash register. You don't have to worry about the internal controls as much if you're just getting paid by YouTube or something, but if you're handling actual cash in a cash register situation, you probably want to be recording the sales as they're happening in some way, shape, or form, and be able to check out the sales for cash sales and credit card sales to what actually clears the bank or what the deposit will be at the end of the night. So typically, what you'll end up doing is creating, recording the sales as they happen, and then you're going to be recording them not directly into the checking account, but rather you're going to record them into the funds to be deposited or undeposited funds is what it used to be called a clearing account so that you can then group that money into the format necessary so that when you deposit it into the checking account, it will have the same format as what will be on the bank side, which will come through on the bank feeds, and then you'll simply match out the bank feeds to the deposit that you've already made. So basically, there's three kinds of methods that you could use the bank feeds for. We could just say, I'm just going to do my sales, wait till it clears the bank, and then just record the sales as they clear the bank with the use of the deposit form number one. Number two, you could create the sales receipts and then connect the bank feed to the sales receipt. Now, it's not likely that you're going to want, going to be able to do that all the time on a sales receipt situation as you might be able to do as we saw with the invoice, because usually with the sales receipts, if you're at a cash register, you're more likely to get paid with different formats, meaning you might get paid some with cash. And if you're accepting credit cards, you have to deal with the credit cards and so on. Whereas if you're dealing with an invoice, and you email the invoice and tell the client, I would like you to pay me with the format of an electronic transfer, then you know the electronic transfer is going to hit your bank in the same amount that's on the invoice. When, on the other hand, you're dealing with cash transactions, you're going to have to group the cash together and at the end of the night deposit it into the bank. And that means the grouping will be different than each individual sale. And if you have a credit card, the same thing will basically happen. The institution, the credit card company will group the sales in a format that will typically be different than each individual sale, which will mess up the concept of just tying the bank feeds out to the sales receipt, but will demonstrate what it would look like. And then third, you have to use the undeposited funds, right, or the funds to be deposited or whatever they call it now, which means you're going to you're going to record the sales into a clearing account and then take the money out of the clearing account and deposit it at that point. Okay, so let's check those out. Let's go to the first tab. And let's select the drop down and let's imagine that we're not going to do the first method of just waiting until something clears the bank because if it just cleared the bank, all you would do is go to the transactions over here. And if you're at a cash register and you just make the deposit at the end of the night, you wait till it clears the bank, you can sort by the money in. And then when it clears the bank, you're just going to record it as revenue as it comes through. And I don't have any detail of the customers in that way, but you might not have need any detail if you're do a food truck or something like that. And that would be the simplest thing to do, although you would have to deal with sales tax, like we talked about in a prior presentation, because the deposit form isn't one that will that will record the sales tax for you. So you'd have to kind of manually do the sales tax. All right, method number two, we're going to hit the plus button. We're at like a register, we're going to record the sales with a sales receipt as we go. So it's a cashed based transaction because we're doing this the work at the same time. Let's say this is customer one of my let's just say 10 customer 10. And tab now if you're at a cash register, it's likely that you just set up a cash register customer or something like that, because you're probably not going to take the name of every individual that that goes to a cash register at like a restaurant or a food truck. So you might use like a generic customer for example, let's say this is on Oh, three, let's say Oh, three, 1024. So it's in the third month that we've been working on. And let's imagine first that that we're going to have them pay us with an electronic transfer. So it's going to be a transfer. And if we're able to say that, and I'm just going to add that for reference purposes, if we're going to be able to say that they're always going to give us the money in an electronic transfer directly to our account, then we might not have the grouping problem that comes into play with credit cards, intermediary financial platforms and cash. That's when you might be able to say I'm going to deposit this directly into the checking account. So let's imagine that we had a service. It's just going to be a service item to do services to and let's say that it was $367 for the service. And we're not going to put a class, it's not subject to tax. So this what's this going to do then it's going to be increasing the the it's going to increase the revenue for the services on the income statement and the other side is going to go into the checking account directly because it's basically a sale at a cash register. We didn't deal it with any income tax or sales tax at this time. So let's go ahead and save it and close it and check it out. So if we do that, I'm going to go to the tab to the right and then run it. And if I go into the checking account, I could see it in the checking account for the $367. If I go into that, we can see it here. So that is good. I'm going to close this back out. I'm going to go back to my balance sheet. If I go to the next profit and loss, it would be in revenue and we put it into a service revenue. So the revenue would be recorded here, which is nice. So there we have that. If I go back, also note that because we used the proper form and didn't just wait till it clears the bank, we would have the added capacity to run sub ledgers by item and by customer for the income line items. Let me just show you that real quick. If I go to the tab to the right, right click and duplicate. And if I go down to the reports on the left, close up the hand buggy and I'm looking into the sales and customer reports. So I then have these sales by customer detail. Let's take a look at that one. And then we also have sales by product detail. Let's take a look at that one. So and then I'm going to close the hand buggy and change the range going from 010124 to 033124 and run it. So there we have it. So now we have all the ones where we used an actual sales document and not a deposit form will allow us to break out our sales number on the income statement by who we sold to. Now at a food truck, that might not be as relevant because again, you might not get the names of all the people you sell to, but just note that if you do collect the customer names, then using the sales receipt will give you this added detail of reporting which you wouldn't get if you just wait till it clears the bank because you would use a deposit form. And then if I do this one, this one is going to be from 010124 to 033124. This is the sales by the items that I sold. So if you're at a food truck or something like that or a restaurant, then this could still be useful because now you can break out your income by the things that you sold, which could give you some useful information. Now these two, this 3200, should in a perfect world, it ties up to this one, 3202, 3202 and should tie out to what's on the profit and loss for income, which would be here. It doesn't, right, because much of the income that we've been recording, we recorded with a deposit form, which doesn't have an item and QuickBooks doesn't see the customer in the same way to create that subledger report. So just want to point that out. If we go to the internal tab over here and we go into the sales, we can go into the sales transactions and we can search for the transactions that were sales receipts. So there are our sales receipts, kind of cash register type sales. If I go to the customers and I look for customer number 10 or recent, let's go to like recent, recently paid, there's customer number 10 and there's our information here. Now this isn't going to be as necessary to track because you're not tracking the accounts receivable in the outstanding balances. And again, if you're at a cash register, you might have all of your customers and like one generic customer, but you can still go internally and see your data in this format as well. Now on the bank feeds, what would happen on the bank feeds, which we will show shortly after we do another example, we'd go to the transactions, the bank feed would come through for the same dollar amount, if it were as an electronic transfer, and we could just match it out. And that would be the first method you could use. Now again, you probably aren't going to be able to use that method though, because if you're collecting anything other than electronic transfers, you're going to have this batching problem. So let me show you what the batching problem is, and then we'll add the bank feeds for both of these. So let's do this again, let's say that we're going to go to an invoice, not an invoice, a sales receipt. And we're going to say this is going to be customer 11 this time, and we'll just set up customer 11. And we're going to say this happened on 311. And this time, let's imagine it's a cash sale, which you'd have the same issue with a credit card and therefore I'm not going to put it directly into the checking account, because I'm not depositing the cash into the checking account. And if it was a credit card, I'm not putting the credit card into the checking account right now, there's a financial intermediary that's going to mess things up in terms of the grouping. So what I'm going to do is put it into the funds to be deposits or payments to deposit, which used to be called undeposited funds. Let's do the one with an inventory item just so you can see that the sales receipt is basically like an invoice. So here's our result, a piece of inventory now. So the transaction on this one is going to be a bit more complex. Let's change the sales tax again to generic 5, generic 5%. So what's the transaction here going to be? Well, this time, instead of increasing accounts receivable as done in an invoice, it's going to increase not the checking account, but payments to deposit because we changed that by the full amount 183.75. The other side revenue is going to go to revenue or income 175. The difference of sales tax is going to be off income statement on the balance sheet increasing the payable account 8.75. And then inventory is going to go down, not by an amount on the sales receipt, but by $100 in this case driven by the item and then cost to goods sold the expense related to what's selling the inventory is going to go up. And the net impact on net income is 175 sales price minus the cost of goods sold of 100 for $75 increase net on the on the net income. And the sub ledger for the inventory is going to go down by units because we're using a perpetual system perpetual inventory. So let's go ahead and save and close that check it out real quick. So we're going to go to the balance sheet to do that checking of it out. And we can go and say, okay, now we put it into the payment to deposit account. So it went into the payment to deposit account. Once again, that 183 for the full dollar amount. And then on the income statement, it went into the sale of product. And so we sold another piece of inventory for the 175 not including the sales tax, the difference of the sales tax back on the balance sheet, it went into the sales tax account. I won't go into it, but it's in there. And then the inventory went down. So the inventory here went down. This is the same thing that happens when you self check out something at like a grocery store or something like that, you see the sales price but also the inventory is going down because the system has been set up that even someone as clueless as I am when I walk into the grocery store can scan something and I only need help like, you know, maybe 70% of the time but like 30% of the time, I get it done myself. And that's how easy it is. So I go to the first tab then. So that that is that let's add another one. Now, if I go to the first tab and add another one, I'm going to say that this is going to be another sales receipt. And we're going to say dude, and say this is for customer 12. And again, we might just put all these into generic customer for, you know, our food truck sales or whatever. But let's say that happens on 311. Again, it's going to go into payments to deposit. And let's say this time, we just have services. So we don't have to deal with the sales tax thing or inventory for will say 50, $55. I'm just couldn't think of a number. So this is going to increase the payment to deposit the other side is going to go into revenue this time a service revenue on the date of 311. All right, let's save and close that just to check that out. So let's go to the balance sheet, run it again. Now we have these two amounts in this clearing account payments to deposit. So we've got then these amounts in there for those two sales receipts. Let's go back on the P&L profit and loss. We had revenue that's being recorded at this point in time. So there is our revenue revenue revenue. All right. Okay. And so then now so so now what's going to happen then is I cannot just wait till this clear if this when this clears the bank then what's going to happen it's going to clear the bank if I go back to the first tab as one lump sum. So you see the problem. I couldn't just deposit those at the on the cash register directly into the checking account because then it wouldn't match what clears the bank because at the end of the night I'm going to go to the bank and deposit 238.75 into the bank not two separate deposits of the two amounts that I have there right. See if I deposit these two separately what would happen that would mean that I would have to I would have to go into the the bank feeds and match out two separate things which it wouldn't automatically be able to do quick books wouldn't be able to see that automatically and that's not what I so that's why we want to use the clearing account and not put it directly into the checking account. So let's let's mock let's make a mock of the bank feeds now. So we're going to have date and then amount and description. So the date I think was on three I think one was on three ten two four and the amount of the first one that we did was let's go back to the first tab and let's go into the sales customers and we did one recently paid for customer number 11 I believe. Let's do let's go back and I should have gone back with the other button but customer number 10 and so that was 367. So let's say that clears the bank two on three ten three sixty seven for the same amount and it was a it was a transfer customer ten and then the other one that happened let's imagine what's going to happen next is we would go into the bank deposits and you could see the grouping so it's going to be deposited on three eleven for two thirty eight seventy five so let's say okay that's going to be two thirty eight point seven five and that's going to be on three eleven two four we will say and this was a cash deposit so that's all quick books or the bank is really going to see that we deposited cash at the end of the night for the two sales that we made. So let's save that and upload that as though they came through the bank feeds now so I'm going to go file save as browse and let's make it a CSV file so we can upload it comma deliminated that is that's what that means and then we're going to say save it and then let's go back on over close this up for now we'll be back there later open the hand boogie transfers bank transactions let's close the hand boogie drop down let's upload from a file so we're going to upload our latest bank feeds for the practice problem four four nine and then continue and we want the checking account continue yes one column yes that's the date format date date description description amount amount movie B to the end B and selecting those items and continue to items importing on the deposit side that's what we like to see okay all right so then if I go in here then we've got our two deposits let's see if I can sort by money in so so this one notice it found the match on this one it didn't find the match on this one see so so this one why did it find the match it found the match because we're imagining that we're at whatever our cash register sales were only accepting transfers right an electronic transfer that hit the bank in the same format that that that they're going to transfer it in so the dollar amounts going to line up that way because I didn't have to compile sales together when I make the deposit as would be done with a credit card or a cash deposit or other financial intermediary transactions so it matched out nothing news going to be recorded here it's already been recorded but this will help us with the bank reconciliation process so I'm going to say boom that one's good good to go this one it didn't find it right so this one is the one where we had two that were grouped together so you think we could go to the matching here and if I went to match these two add up to that amount so you might say hey I can still do it this way because I could just go in here and check these two off which which match out to the deposit that we made however you don't usually want to do that because you don't want to make this process of the bank feeds difficult it's usually easier if you find yourself having to do this kind of thing to fix it on the bookkeeping side before you get to the bank feeds because you would like the bank feeds to be basically automatic right I wanted to come into the bank feed so QuickBooks can actually see it themselves and give me the match they should be able to tie it out if they can't tie it out because they're matching multiple things then I want to fix my process that's why we're using undeposited funds so instead of doing this what I'm going to do is say the amount that's in then in the payments to deposit I'm going to deposit into the checking account in the same format as will come through the bank with the bank feeds and or beyond the bank reconciliation on the bank statement right so how do I do that I go to the first tab plus button I'm going to make the deposit myself using QuickBooks cool little tool which is got that all the ones that are in undeposited funds here which would include sales receipts and receive payments from that that I might have from invoices it also gives me the payment method which is useful for internal grouping because you would think if these were both cash for example then I would have deposited them at the same at the bank together but if they were two credit cards then the credit card intermediary company is going to group those together somehow and then put them into our bank probably right so if I saw a credit card that were the same financial institution I can group those together and try to figure out based on the credit card deposits which ones and how they grouped them now if they were credit card deposits the credit card company might also charge you a fee before it actually hits your checking account which means you'd have to possibly make another account down here which is another reason you have to take this step and not just wait till it clears the bank and put a negative five to or whatever the charge is to make sure that the deposit that you make I'm going to check check these two off would be the deposit minus the five to get you to what's going to actually clear the bank in our case I don't have to do that because we're imagining it was cash and therefore the cash being deposited is 238.75 so let's save this this will move it from undeposited funds or funds to be deposited or payments to deposit or whatever they call it now to the checking account let's save it and then let's go to the balance sheet and run it and let's go into that checking account to check it out and we're going to say that so there is the two there's the deposit made in one lump sum now instead of two transactions and then when I go into the payments to deposit it's back to zero that's what a clearing account does it goes up and back down it's not a temporary account it's a clearing account and so it has gone back down to zero that for some reason that the negatives are not red right now I like them to be red I thought they were red before but anyways you could see the two transactions ticking and tying out over there and then if I go back to the first tab now you can see without even refreshing the screen that it found the match so so this means that QuickBooks is not going to record anything new when I make the deposit but it makes the system still easier because it's going to help me with the bank reconciliation process and by the time I get over here to the bank feeds again it should be easy it should be able to find the match exactly because the dollar amount will tie out and the date will be close and then we can just match it out so that's the process all right let's go this is where we stand at this point in time with the balance sheet this is where we are at with the profit and loss report and I'll just show the trial balance if you're following along I think the trial balance is the easiest report to follow along with so let's run that and if your numbers tie out great if not you can try changing the date range it's often a date issue and then drill down to the source document and if it is a date issue you can change the date on the source document something useful to do in a practice problem but you want to be careful doing that in practice