 QuickBooks desktop 2023. Bank feeds matching invoice to deposit. Let's do it within to it. QuickBooks desktop 2023. Support accounting instruction by clicking the link below, giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. Here we are in QuickBooks desktop bank feed practice file. We started up in a prior presentation going through the setup process we do every time in the view drop down. We got the hide icon bar the open windows list those checked off the open windows open on the left reports drop down company and financial it's open the P and the L the profit and the loss change that range from 010122 to 123122 and then customize going to the fonts to the numbers changing it bringing it up to the size of 14 okay yes okay let's go to the reports drop down again company and financial this time the balance sheet customizing it first and then doing the changing of the ranging 010122 to 123122 fonts to the numbers are going to be changing and there's 14 okay yes and okay we're going to open up the bank feeds which are in the banking drop down bank feeds bank feed center which would only be there if you had bank feeds turned on which we have done in a prior presentation I'm going to go into the unrecognized area we're not going to focus in on the deposits once again I'm going to sort here and then by the deposits and we want to think about deposits now that are going to be a little bit more complex so let's go back to the home page we've been focusing on in prior presentations the deposits would would be related to an industry that would be easy as possible to use the bank feeds to then create the financial statements from something like gig work so we've been waiting so something actually clears the bank and then recording it as income which with in essence a deposit form which we made through the bank feeds so if you got paid by like youtube or something like that if I go to my profit and loss we can wait till that clears the bank and just use the deposit form in the bank feeds to create our income accounts now we're going to think about situations that are more complex and how the bank feeds will fit in to either a cashed based system where we have to use the create sales receipts which we'll talk about in the future or an accrual system where we're going to have an invoice seen process meaning we have to do the work first invoice the client and then track the accounts receivable we're going to start with this one we're going to think about the invoicing process and it's got actually three steps to it generally as you can see you got the invoice you've got the receive payment and then you've got the record deposit so then the question is well where could the bank feeds fit in to this process so we also have the estimate just so you can see how the estimate might fit in so if we're doing an invoice first of all we're on an accrual based system meaning we're going to do the work first such as might be done in a bookkeeping department or in landscaping or something like that and then we're going to have to charge the client for the work that is done with an invoice which is going to increase an accounts receivable account not related to cash clearly therefore it's not going to be related to the bank feeds and then we're going to have to receive the payment possibly tracking and kind of following up with the customer tracking it within the accounts receivable to kind of collect on it once we get the payment we could use this form to directly put the payment into the checking account but by default usually it goes into a clearing account called undeposited funds and then we take it out of undeposited funds and put it into the deposit here into the checking account the reason we have this added step which you might not see or be as familiar with when you're doing financial accounting in like a classroom is because we want to make sure that if we have multiple payments like multiple cash payments for example which we're going to deposit into the bank together we don't want to have separate received payment payments on our side going into the checking account because then we won't be able to match them to what clears the bank because when we put the money into the actual physical bank we deposited multiple received payments in one lump sum that's how it needs to be seen on our side so we can tie it out to what we've seen on the bank either with the bank feeds which can help us with the bank reconciliation or with just like the bank reconciliation process so then the estimate could happen if we're in a system where we're going to we're going to try to see or estimate what the charge will be so we're going to take up a job we set up an estimate and then we might use that estimate to create an invoice noting that the estimate doesn't actually have a financial transaction related to it so we're not going to get into the estimate here we're going to start at the invoice so how do the bank feeds fit into this process normally you would do the whole process you would say okay i'm going to have the invoice that's going to increase accounts receivable and the other side is going to go to sales then we're going to receive the payment that usually is going to be increasing the cash account of undeposited funds the clearing account and decreasing accounts receivable and then i'm going to deposit it in our system into the bank account here as well as physically make the deposit into the physical checking account either cash in the bank or an electronic transfer or whatever it is then i will wait till it clears the bank and once it clears the bank i can match out the deposit we made in the system to what went through the bank feeds however you can imagine a system where you're going to say well maybe i can make the invoice and then wait till the the deposit clears the bank and use the bank feed to tie out to the invoice or maybe i can have an invoice and then receive the payment putting it into undeposited funds and then use the bank feeds to take to to tie out from the undeposited funds to make the actual deposit so there are a couple variations we could have let's first think about that first variation i'll make an invoice and then see if i can use the bank feeds to wait till it clears the bank to then record the deposit a tie in it to the invoice how would that look let's go to the bank feeds let's check it out let's just pick a deposit that we're going to use here i'll pick a deposit i think there's a couple amazon ones that we still had that i might be able to use here's an amazon let's use that one it's only nine dollars that's okay 958 so 958 i'm going to go to the home page i'm going to create an invoice and let's say this is just for customer number one again on let's say 10 5 let's say 10 5 and i'll make a new item let's make it a service item so i service item one tab setting up the item it's going to be a service item and then i won't even put an amount i'll put the amount in later it's not going to be taxable i'm not going to deal with the sales tax and then i'm just going to say that it's going to go to sales revenue account so then i'm going to say okay it was 9.58 958 non taxable item let's just double check that that i have the right amount 958 it was on 922 here so the invoice let's make the invoice before the deposit on 915 uh oh 915 oh 915 22 okay it won't let me do that oh 915 22 okay so there we have it so when we record this it's going to increase the accounts receivable because it's an invoice by that 958 the other side's going to go to sales note that if there was sales tax involved then we could you can use the invoice of course to calculate the sales tax which is nice and and that would just put in place the sales tax component with it as well increasing the amount that we expect to receive increasing the sales tax payable if we had inventory tracking involved on a perpetual inventory method then this would also be decreasing inventory recording the cost of goods sold but our main focus here is just to see how you can tie out the invoice to the to the deposit so i'm going to say okay let's save it and close it save and close let's see what that did let's go to the balance sheet now we've got accounts receivable double clicking on that and that increased by that 958 the other side went to the income statement the p and the l it's in the sales item so there's the 958 there if i go back to the balance sheet we also have the sub ledger that's going to be tracked reports drop down customer and receivable that's going to be the customer balance detail let's say from well here's here's the customer balance detail the 958 so we're getting now our detail on the accounts receivable because we're going to have to follow up on that and collect on it that 958 matches here you also have that information in the customer center customer customer center and we've got this customer number one where we have that 958 so we can follow up with the customer we can send out reports and everything that we would normally do now if i go back to the homepage the next step is that they're going to pay us when they pay us then normally i would i would enter this transaction here and say we have customer customer one and there's the two invoices so i would choose this invoice and so on but maybe i can just use the bank fees i can say hey you just pay us electronically or whatever and then we're going to be able to tie it out to the invoice using the bank feeds i won't go through this process i'll just enter the invoices and then when they pay us i'll tie it out using the bank feed so how might that work if i go to the bank feeds then we see this amount right here it didn't match it automatically which sometimes it might do if i had entered the data input in you know the reverse order meaning i entered the invoice and then we had the bank feeds here that you know but it might not always be able to match because you can imagine what it has to be able to match based on the invoice would have to basically match out just the fact that we have the nine fifty eight dollar amount in order to pick up the right you know the right matching so but if it's an electronic transfer we can see you know who we got it from and everything so we might be able to match it up pretty easily by then saying the drop down let's go to match so we're in that same field but this is the edit more details this is the match and there's the two potential matches that we have this is the one we want the nine fifty eight so i'm going to pick that one up and so then when i record this it should do the next step which was to receive the payment now it's kind of it's going to be interesting to see what QuickBooks does i believe it does a two-step process meaning it records the receive payment puts it into undeposited funds and then takes it out of undeposited funds and records the deposit as opposed to just using like a receive payment that goes directly into the checking account so let's just check that out if i say save to the register so now let's go and say okay what did it do i would expect it to do the second step right here right it would do that second step but this second step usually by default puts it into undeposited funds not directly into the checking account although we could use that form to put it directly into the checking account but i think it's going to do that and then also make the next step so it records two transactions recording the actual deposit taking it out of undeposited funds putting it into the the bank account the reason i think this way that they do it is kind of nice one reason is that when you see the activity in the checking account most of the increases will be with the deposit form whereas if you deposit directly into the checking account with this form within the deposit detail form of the checking account you're going to have some receive payment things which make which muddies things up a little bit in terms of just your details not a big deal but if i go to the balance sheet let's see if that is indeed the case what i'm going to do is i'm going to customize up top i'm going to i'm going to say that i want to go to the advanced settings because i want to see all active sales even if it has a zero in it if there's activity which i would expect on unearned revenue or undeposited funds to show up if i do that so so if i go down here we're going to say there it is there's undeposited funds it's at zero but now i can double click on it so if i double click on it then you could see here that it entered a sales receipt it looks like there's there well here's the sales receipt no it entered a payment so there's the payment and so if i double click on that payment then there it is so that's the standard payment form that is usually the next step after the invoice so there's the customer one it clicked off this invoice which is tied to this invoice that we made closing this back out closing this back out closing this back out and then the other side there usually goes to the accounts receivable double clicking on it so now the accounts receivable has gone back down with the payment closing it out closing it out you can also see that in the customer center so in the customer center we now have the invoice and the payment the invoice now showing as paid so that looks correct and then i believe it made another transaction decreasing undeposited funds with uh with the the payment and then the deposit form the deposit form decreasing undeposited funds here and then moving it from undeposited funds up to the checking account so it actually recorded two forms here where's that nine what was it nine something let's see if i do i need to sort it by deposit there i think that's it that's the one isn't it that one right there let's see if i could sort by yeah that's the one so there it is so you can see that's a plot that's a system that you could set up so i'm going to go back to the homepage so once again we entered the invoice and then we waited till it cleared the bank and we used the bank feeds to still record actually two transactions it recorded the received payments decreasing the accounts receivable other side going to undeposited funds and then it recorded a deposit increasing the checking account decreasing undeposited funds so next time we'll we can also think of a system we'll we'll look at it we're where we will uh enter the invoice and then receive the payment and then see if i can match the the uh deposit to the received payment recording that last transaction which is another possible method you could use and then of course we can we can just do the whole thing and then match the bank feed to the deposit that has already been made in which case we wouldn't record another transaction but would just be using the bank feeds as a kind of bank reconciliation tool all right let's just just just take a look at our uh at our trial balance just just take about that this is going to be 0101 uh 2 2 to 12 3122 and then customize it and we'll go to the fonts and numbers and change it up to 14 okay yes and okay just remember the trial balance great tool when you're entering like invoices and then uh that have sales on it as well as balance sheet accounts so that you can kind of tie everything out and look at everything in one account because you got the balance sheet accounts on top of the income statement accounts without all the subtotals