 QuickBooks Online 2024. Bank feeds matching receive payment form to bank feed deposit. Get ready some coffee and some trail mix because we're hiking on QuickBooks Online, our audit trail to success. First, a word from our sponsor. 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 Accounting Rocks product line. If you're not crunching cords using Excel, you're doing it wrong. I must have product because the fact as everyone knows of accounting being one of the highest forms of artistic expression means accountants have a requirement, the obligation, a duty to share the tools necessary to properly channel the creative muse. And the muse, she rarely speaks more clearly than through the beautiful symmetry of spreadsheets. So get the shirt because the creative muse, she could use a new pair of shoes. 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 those major financial statement reports like we do every time reports on the left in the favorites. Right-clicking on that balance sheet to open a link in a new tab, right-clicking the P&L or income statement to open a link in a new tab. The same with the trustee TB, the trial balance. If you don't have that trial balance in the favorites, you can search for it. Let's tab to the right. Close the hamburger and change the range. We're going three months this time. 0-1-0-1-2-4-2-0-3-3-1-2-4-tab. Dropping down to see month by month and run it. We'll tab to the right. Repeat the process. Hamburger needs to be closed. Range needs to be changed. 0-1-0-1-2-4-tab. 0-3-3-1-2-4-tab. Drop down. Months. Run it to refresh it. Uno vase mas. One more time. Close the hamburger. Change the range. 0-1-0-1-2-4-tab. Wait a second. K-PASA. 0-1-0-1-2-4-tab. 0-3-3-1-2-4-tab. Select the dropdown. Months. Run it to refresh it. Let's go back to the balance sheet. This time we're going to be thinking about more of an accrual system on our revenue cycle. But we're going to see the matching of the bank feed to the receive payment form. Let's go to our flow chart to analyze this again. This is a desktop flow chart. We're thinking for the online system because we're just looking at the flow of the forms for the revenue, sales, income, cycle, whatever you want to call it. The easiest kind of system we would have that we looked at in the past would be one where you just get paid say by the YouTube and it hits your bank and you record it with a deposit form with the use and help of the bank feeds. Then we might have a cash register situation which often makes it a little bit more difficult, especially if we're going to be receiving cash as well as credit cards because we might have to group that in such a way that it will match what goes through with the bank feeds. We'll talk more about that later. Right now we're thinking about an accrual system where we have to basically invoice the client for the work done, then track the accounts receivable to try to get paid and then we make the deposit. The journal entries involved here would be when we make the invoice after we do the work. That increases accounts receivable. The other side then goes to revenue and you might have inventory impacted as well. Then we need to collect on it and receive the payment. We talked last time about basically a system where you might be able to connect the bank feeds to the invoice, which would be easiest to do if you had even the QuickBooks checking account for the payments. When you send out an email for example, you give them the option to pay you with an electronic transfer directly to the checking account. That would be the easiest way to do it so that you get all your payments in an electronic format and then QuickBooks could even help you to basically record the receipt of the payment. But if you don't have the QuickBooks checking, you could still do that by basically when you invoice someone telling them how to pay you possibly with some form of electronic transfer to your checking account, which would then come through the bank feeds. As long as your bank feeds deposit is matching the invoice, you can use the matching concept to record it, which would then record the received payment and put it into your bank account, lowering accounts receivable, increasing the checking account. Now, what if you can't do that system? You can't possibly do that system. It might not work well if you're going to receive other types of payments such as cash, such as credit cards possibly, and such as having some intermediary platform like a PayPal or like a Stripe or something. Why? Because when you get the payments from the customers, these intermediary platforms like a credit card will typically group those payments, might actually take a fee from the payments, and then put it into your checking account as a lump sum. Therefore, the lump sum payment that goes into your bank feeds is not going to match what is not going to match up to the invoice easily, and that will cause a problem. So if you're in that situation, if you're receiving payments other than electronic transfers and you have any kind of payment where you have this grouping problem, then you probably want your whole system to be one that's the same, meaning you're going to use the received payment form to then deposit into undeposited funds, a clearing account, so that you can then deposit yourself using a deposit form and be able to deposit in such a way that it'll match the bank feeds. Okay, so let me show you what I mean here. If we go on over and let's run a couple scenarios. So let's say we have an invoice, let's make an invoice, and we're going to say this is going to be for customer, let's say customer five again, or let's say six, customer six, new customer, set it up. And we'll say this happens on 0302, 24. So the due date we're going to say is 30 days later. And so then we're going to say let's do the same thing with our more complicated transaction that has tax related to it. So we're going to sell an inventory item again, and we're going to sell one of those. Tax is being calculated. I'm going to adjust the tax to the generic 5%, the generic five for our practice problem. So this is going to be an invoice. What's it going to do? It's going to be increasing the accounts receivable 18375, increased sales 175, increased sales tax payable liability 875, decrease the inventory by 100, not on the form driven by the item, increase cost of goods sold by 100 net impact on net income 175 sales price minus the $100. So our concern here is to receive the payment. So you could the easiest way, like I say is to possibly use the payments for QuickBooks, use their checking account to set that up, and then tell when you email the invoice, have them pay it with an electronic transfer directly to your checking account. That would be kind of like the easiest thing to do. But you can also do that electronic kind of payment system without their checking account. Just say that you tell your clients how you would like to be paid and give them the payment options for you, which would be transfers. But again, if they're going to pay you with something like cash, then or a credit card that could mess up the system. So let's go ahead and say we're going to save this. Let's hit the drop down, save it and close it. Let's look at the transaction balance sheet running it. And we know in the accounts receivable for March, if I go into it, we now have our transaction once again for customer number 618375. And then on the income statement, we recorded the revenue in the sales. So sale of product for the 175. And then back, the difference is on the balance sheet in the sale tax payable and inventory went down, which isn't my major focus, but I'll just show you that the inventory is going down by 100. And the other side's going to cost of goods sold, which is going to be here by the 100. So our concern is tracking the accounts receivable. Now let's go back to the balance sheet. The accounts receivable has a sub ledger breaking out by who owes us the money. Let's go to the tab to the right, right click, duplicate that tab so I can just show you that sub ledger. And so it's in the reports closing the hamburger, scrolling down who owes you. We want to think about and see the customer balance detail. Customer balance detail. Now we have that customer number 6 here that owes us money. The total amount then 238375 should match out to what's on the balance sheet 238375. If we track it internally, go into the tab to the left in the sales center or customer center, we could track it looking at all sales and then track the open invoices. So we have our open invoices here. So then there, I turned it off, there it is on. And then invoices, we could track it here, which is probably the most common place to track it. And we're looking at the unpaid invoices here. We could track it by customer and look at the open invoices by customer. Now we're going to have to collect on this if I go into the customer, then I can see in the receive payment that the next thing I would do when they pay us would typically be internally received payment, which would then tie out the invoice to the payment that we would receive. Now again, like we did last time, if we got paid directly into our bank account with an electronic transfer for that exact amount, then I could wait till it clears the bank and the bank feed will see the match and it will do that receive payment form for us possibly. But let's imagine that I'm not going, it's not going to work that way because I have either a credit card or a cash payment. So let's imagine, for example, I have another transaction that happens, a plus button and invoice, and we have another invoice. And this will be for customer, let's say number seven, customer seven tab. And we'll say, there's the customer. And we're going to say that that's going to be, I put it into 24 seven customer. Okay. But I'm going to say that that's going to happen on, let's say 32 as well. And let's say this one was just a service item. So we sold services. And let's just say that that was for $60. It's not taxable. We don't have sales tax. This is just going to increase accounts receivable. The other side going to revenue. So we'll say let's say that is save and close. And then if I go to the balance sheet, run it. Now we have in accounts receivable, another, another 60. It's also in the sub ledger. If I go to the sub ledger and run it. So now we have the added 60 as well. And if I go to the internal documentation, go into the customers and look for the open invoices. We have open invoices for both this customer and this customer. Now, when they pay us, let's say that they're going to pay us like cash or credit cards. And the credit card company is going to batch them together before it hits our checking account. Well, in that case, I can't wait till it clears the bank. I'm going to have to say I'm going to receive a payment from customer number six. Let's say it happens on 0304 or let's say 0524. Let's say it's a cash payment. And then it's so I so in this case, I can't put it directly into the checking account. I could because I could put it directly into the checking account here. And again, if the bank feed was that exact amount and the date was close, the bank feed would match it out. But but if I was going to use that method, I might as well match it out to the invoice. So so so what I'm going to do is instead I'm going to put it into the clearing account, which used to be called undeposited funds, which is now called payments to deposit. So what's this going to do? It's a receive payment form. That means it's going to decrease the accounts receivable. The other side goes into a cash account, but not necessarily the checking account. In this case, the clearing account a payment to deposit and it's attached to the invoice that has been paid. Let's say save and close. So now if I if I look at the detail for that particular customer, we can now go into like the customers recently paid. So now it has been recently paid and it was for customer number six. I think customer number six. So if I go into that customer, there's there's the invoice. So if I go into the invoice and look at the trail, it was open then it was paid has not yet been deposited. So we have it in the payments to deposit. And then if I was to look at that invoice and edit it, I can see that it is paid here, paid in full. And then it's been attached to this payment form that we created. I can edit that payment form and once again see that it's tied out to that invoice. And this is a link to the invoice. Everything's kind of linked together, which is nice. Let's do the same thing for the other payment. So I'm going to close this out back to the customers and let's look at the open invoices and imagine we also got paid by this one. And we're going to receive a payment and let's say it was on 040524 cash payment. And then again, I'm putting it into see how the default now is going into the payments to deposit. If you use this account, you probably want to use it with every received payment form so that you're not toggling back and forth between the checking account and the payment to deposit. Because I think that would be an area that can cause errors. This will once again reduce the accounts receivable and record the cash going into the clearing account. Let's save it and close it. If I look at it internally, same kind of thing. The invoice has now opened, paid, not yet deposited. So where did it go? Let's go to the balance sheet. Those two transactions run it, decreased the accounts receivable. So the accounts receivable goes down by, so there's the 183. I'm not sure I picked the right date on the $60 one. What did I put on the date? Let's go internally and say I put it on 4-5. Let's see if I can edit that one. Let's say it was on 3-5, right? That's what we were trying to do here. 3-5, save and close. Okay. Sorry about that. Back to the balance sheet. Run it. Okay. So now in the accounts receivable, we've got these two transactions here decreasing the AR. Accounts receivable should just go up with invoices and down with payments all the time. The subledger should be adjusted so those are removed from it. So the subledger still matches 2002, 2002. The other side of the transaction goes into the payment to deposit account here. So we have in here the 60 and the 183.75. So now let's go back. Okay. So now let's imagine what's going to clear the bank. If we have a credit card that's grouping those payments together, or if we are making the deposit of cash into the checking account, it's going to hit the checking account as one lump sum, not as two amounts. So let's show that by making a bank feed over here. We'll say date, and we'll say this is going to be a amount and description. The date, let's say is on three, what did we say? 524 amount. We're going to say it's for the full amount that's going to hit it 243.75. So 243.75 description is going to be cash deposited. Because we're going to imagine we went and deposited or the credit card. If it was a credit card, it would be a deposit from the credit card on the bank feeds. Let's save that and save it file save as. I'm going to save it as a CSV so we can upload it as though it came through the bank feeds. So I'll save it and close it. And then if I go back to the first tab, we're going to go to the hamburger, transactions, close the hamburger, and then bring this in, upload from file, find that file. There it is, 445. That's the number of the presentation if you want to look it up and use it yourself. If you have access to it, it's going to be the checking account that it's going to go into. And then we're going to say continue. It's yes, one column. That's the format of the date, date, date, description, description, amount, amount. Looks good. Continue. There it is. Let's pull that one in and continue. Yes. And done. All right. So now if we look at that one, so there's the cash deposited. Notice that it didn't just match it up to those two receive payments because the receive payments have two forms that hit our system in one lump sum. So if I go into this one, for example, I could go to my matching and then for some reason it's only showing one of the payments here. But the idea is that I could check them off down here to tie out to the balance. But I don't want to have to do that over here on the deposit side of things. When I'm looking at the bank feeds, it would be easier for me to take care of things internally if I have to deal with something like this. So for example, let's close this out. And then I'm going to record the deposit on our side and then group it properly and then the bank feeds should pick it up. So if I go to the balance sheet over here and I say that at the end of the day I take the money and I deposit into the bank, I'm going to make the transaction of that 243.75 that's going into the bank with the help and use of a deposit form. So if I go to the first tab and I select the drop down and I deposit it instead of waiting until it clears the bank with a deposit form, you can see in here it shows me those two payments. And if I group them together, it's going to be deposited as a lump sum of 243.75. Now if you dealt with a credit card, you might have to check those off and also deal with the fact that the credit card might batch your payments and charge you a fee, which you might have to put an expense down here of a bank fee. And then say that that's going to be like whatever $5 that they charged you $6 so that you get the deposit to tie out to what's actually going to hit your bank account. But we don't have to do that here. I'm going to remove that. Say we deposited 243.75. What's this going to do? Increase the checking account by this amount, 243.75 instead of this and this. And then it's going to decrease the clearing account back down to zeros. Let me change the date first, however, back to March 5th. All right. So then okay, let's do it. Let's go save it and close it. And then if I go to my balance sheet, we're going to say run it. And then in March, we should have a deposit of that amount of 243.75. It's hitting in one lump sum instead of in two amounts. And then the payment to deposit has gone back down to zero. So back down to zero on that one. Okay. So then I'm going to go back. And then if I go to my bank account over here in the transactions for the bank feeds, I'm going to refresh the screen. I didn't even have to refresh it. It picked it up. See now it matches it out. So that's typically the process that we would have. And now it can see it because if I go to find the matches, it's picking up that deposit form easily. So that's how you basically want. So I'm going to, do you want to leave it out saving? I'll say yet. That's how we basically want to do it oftentimes. So the bottom line is if I look at my flow chart, we can possibly match the bank feed deposit to the invoice. If the invoice amount will be the same amount that clears the bank, you could receive the payment manually and then deposit that directly into the checking account and try to match that to the bank feeds. But if you're going to do that, you might as well just do the, you know, match it to the invoice. If you have a system where you have to deal with credit cards or cash payments, then you might have multiple receive payments and even sales receipts were their cash or credit card. And in which case you could try to tie out the bank feed to the receive payment forms. But to do that, you would have to use the matching feature on the bank feeds, which would be difficult and not usually the best way to do it. If you find yourself doing that, then the work around what you need to do typically is use the undeposited funds, meaning you're going to manually record the received payments as well as the sales receipts as we'll see in a future presentation directly into undeposited funds or funds to be deposited. And then use the deposit form, not through the bank feeds, but actual deposit form to properly group the transactions to your checking account in the same format as they will be grouped from the credit card company or when you make cash deposits. So that when you do the bank feeds, you're not actually going to record a transaction. You're just going to match the transaction here. But it will be the easy thing to do on the bank feeds, right? That's going to be the idea. So we match it and there we go. All right, let's just take a look at our trial balance to see where we stand at this point in time. This is where we're at. So if you're following along, then if your numbers tie up to these numbers, great. If not, then it might be a date range issue. You might increase the date and then drill down on the numbers that differ and possibly to the source document and change the date.