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Receiving Payments & Making Deposits, Part 2

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  • Intro 0:00
  • Handling Down Payments or Pre-payments 0:07
    • Apply Credits
  • Making Deposits - Selecting Payments to Deposit 5:58
    • Payments to Deposit
    • Make Deposit
  • How QuickBooks Handles the Deposit 10:16

Transcription: Receiving Payments & Making Deposits, Part 2

Welcome back to Educator.com0000

This is the lesson regarding receiving payments and making deposits.0002

The first thing we are going to talk about in this lesson is handling down payments or prepayments the customers give to us.0008

So, the first thing we want to do in QuickBooks is understanding the scenarios that go0015

around to why a customer might give us a prepayment or a down payment for jobs.0022

That might happen in various scenarios, and so we are going to show you how to handle that and how to record that,0027

so we can keep track of the money that are received from our clients.0033

What we are going to do is we are going to go ahead and go to the Customer Payment.0039

In order to get into Customer Payment, we have to click on Receive Payments.0045

So, from the Customers menu, we are going to click on Receive Payments.0049

The other way that we can get into that is from the Home screen.0054

We can look on the chart or the flowchart that we see Receive Payments on the lower middle half.0058

It brings up our Receive Payments listing there, and we can use Abercrombie Christi. There are no one applied invoices for this particular customer, it tells us.0067

Well, our client went ahead and made a check to us of $4000 for a prepayment or a deposit on work to be done.0080

So, the amount is $1000 that we have received, and the check no. is 4321.0090

Of course, this is a check that the customer paid to us. It could also be a Visa or a Master or debit card.0100

We can go ahead and put in a memo that this is a deposit for future work.0108

Now, we have a couple of options here. It says we can leave the credit to be used later or refund the amount.0118

Well, in this particular case, we are going to go ahead and Leave the credit to be used later.0124

A lot of times, when we receive the money, why even deposit when we can just return it to them.0129

At this point in time, if it has nothing to do with an overpayment and applying any amount to the check to an outstanding invoice.0132

So, we are going to go ahead and leave the credit to be used later, and we will hit Save and Close.0142

And it is going to say A credit for overpayment will remain on the customer's account.0149

We can go ahead and click Print credit memo, or we can go ahead and click OK to the transaction.0153

At this point in time, we are going to go ahead and click OK to save the transaction, OK?0159

Now that we have done some work, we are going to go ahead and create an invoice for that customer who actually made that deposit on account.0165

So, how do we create invoices? A couple of items, a way we can do that is from the Icon menu bar, we could choose Invoice.0173

From our flowchart on Home screen, we can click on Create Invoices, or from our Customer menu, we can say Create Invoices.0182

So, once we get into our Create invoices window, we are going to type in Christi Abercrombie, and it is going to display an estimated window.0193

We do not want to create invoice from an estimated list at this point in time, so we will hit Cancel on that.0204

And we are going to go ahead and choose a template from a dropdown list, and we are going to choose a custom progress invoice, OK?0210

We are using this particular custom invoice, and we are going to click on the Item column.0225

Actually, I am going to use over here just the Rockcastle invoice from that. We will just use the normal one there.0230

Under the item, we are going to choose Removal because we did a removal service, so it is removal labor for this particular customer.0239

We are going to hit tab. The quantity is going to be 40, so we used 40 hours of removal labor.0247

We had a rate of $35. Notice that at the bottom, it is going to apply...we are going to see an amount ready to be applied down here.0255

And we should see that Amounts of Payments applied, so we can say Applied Credits down here.0268

And we are just going to see the Changes of the transaction must be recorded before you continue. We are going to say Yes.0275

And we are going to see that there is an Applied Credits button.0279

And we see the amount of $1000 the customer went ahead and prepaid us on a deposit towards this work.0283

We can definitely say Available Credits. Choose that and click on Done.0291

Now, we will see that the payments applied down here is now utilized, and the balance due is the $400.0296

So, here is our service for the labor hours of the removal at $35, $1400 invoice less the down payment that they have already paid to us.0305

Now, we can go ahead and click on Save and close, and it bills that invoice to our client.0318

We can look at that by looking at our Customer Center and seeing Abercrombie that there is a $400 balance due.0322

And we can see here is our invoice that we just invoiced for $1400 in the Customer View section.0334

And here is our payment of $1000, so that, kind of, gives us a nice overview of that.0342

Now, we have gone through several scenarios on receiving payments and how QuickBooks affects that.0350

So, we are going to go ahead and show you how to make a deposit now by selecting Payments To Deposit.0358

Once we have received so many checks and so many payments from our customers.0365

And we have shown you how it dumps it all into a holding account called Undeposited Funds,0369

the next thing we want to do is we want to make a deposit of those checks.0374

We have had those stacking up on our desk for quite some time, so in order to make a payment, we are going to go ahead and show you how to do that.0379

Under the Home screen, we actually can click on after Receive payments, it gives us a flowchart that shows us how to record deposits.0387

We can also go into banking and say Make a deposit. It will get us to the same Deposit screen.0397

From here, I am just going to use the flowchart and say Record deposits. It is going to pull up our deposits or payments to be deposited.0406

It is going to show us all the different checks that we have actually received in this listing.0416

We can view those at All Types. We can change them down just to view it by maybe cash, card or whatever.0422

But, these checks on hands that we are looking for, here they all are: cash, check, check, check, check.0430

So, we have some cash to be deposited etc.0435

We are going to choose just a few of these items. We want the $1000 from Abercrombie, that $100 check that we received from Mike Blake,0438

the full amount of 16,000 we got from Robert Allard and the $1000 that we got from Robert Allard, as well.0446

So, we are going to choose those items that we are going to make a deposit today.0454

We do not have to check all of them, but we are just going to check these. These are the ones we are going to make a deposit on.0457

Normally, we might want to go ahead and choose all of them and deposit them all at once, but for some reason, we are in this scenario.0463

We are going to go ahead and hold off on depositing these other items.0469

Once we have all those items that we want to deposit in the bank, which totals 18,779.03, we will go ahead and click OK.0473

It brings us into our Make deposit window here, and this is where we want to assign now what bank account we are depositing these funds to.0482

And this is going to be in our checking account.0493

It is going to give us a scenario or a summary rather of the items that we chose to deposit. It totals 18,779.03.0497

The Deposit To field is to our checking.0508

Note that if we have money to deposit that is not the result of a payment we received for sale, you could enter in the Detail area of the window.0512

For example, if you received a premium refund from your insurance vendor, we can actually enter it directly right here.0520

As an example, we got a check that was not against any invoices from clients.0527

But, we needed to make the deposit, so let's say we got it from our insurance company.0536

We are going to ahead and quick add that. It is a vendor of ours.0544

And we got $542 from them, and it is check, and let's say the check no. is 100259, and this is an insurance refund.0548

So, we are receiving that, as well, so our total deposit now is $19,321.03 in this particular example.0567

You might have a different figure if you are using other examples.0573

So, we will go ahead and Save and close, and it is going to go ahead and...oops, sorry.0577

We have to assign that account for the insurance refund, so I am going to put down insurance, and it is for a Workers Comp. refund on our insurance, OK?0583

So, we are going to apply that. Hit Save and close, and now, it records that deposit.0595

We will notice that when we look at our lists and look at that undeposited funds, it reduces a little drastically.0599

And then, it will show us exactly how that works, OK, when we look at the undeposited funds.0608

So, now, the next thing we want to do is look at how that deposit works.0617

We can look at the Undeposited Funds by choosing Lists, Chart Of Accounts and double clicking on our Undeposited Funds.0621

And it brings that up into a little check register or register for that, and we can see how we have now deposited those funds.0628

Here are the checks, and we have actually deposited all those, OK? It takes them in and deposits them, so now, our register, kind of, goes down, OK?0637

So, that is how QuickBooks handles that, and it shows us how that all works. We can also look at our checking account and how that is affected.0650

When we look at the actual deposit that we made, and we can look at our checking account here,0660

there is our large deposit that we just made here- $19,321.03.0669

We can look at the details of that by clicking on Edit, and it pulls up that Deposit Summary screen that we have, OK? That is how it works and handles that.0673

Now, suppose we have put together a situation where we are going to make a deposit, and we want to receive cash back from our deposit.0687

I do not recommend doing that. I like things to be clean and clear on our accounting.0700

So, when we make a deposit for our customers that we make a clean deposit, but there might be scenarios if you are a sole proprietor.0704

It is your business, and you might make a deposit you want cash back for various reasons. We are going to show you how to do that.0713

I do not recommend doing it. I like to make sure that we make a deposit.0721

And then, if we want cash back, we write a check to the bank for cash and record that for the reasons that we have.0725

But, in this scenario, we are going to go ahead and show you how to do it. Again, I do not recommend it.0732

So, we are going to show you how to get cash back from a deposit.0737

We are going to go ahead, and from the Home screen, we are going to click on Record deposits.0740

And we will deposit this $2000 here that we got from Jacobson, and we will click OK to make that deposit to our checking.0747

We are going to make sure that there is Cash goes back to, and we are going to say "Well, it is going to our petty cash".0763

If we do not have petty cash, we would go ahead and type in Petty Cash. Click on tab, and add that account on the fly toward Chart of Accounts.0768

Cash Back Memo, we might go ahead and say that this is petty cash for office supplies and other items, OK?0778

And let's say we want on the cash back, let's see, we might want to take out $200 for petty cash, OK?0793

From here, we see that the bank has checking account. We have $200, and hit tab.0806

And once we hit tab, it recalculates that the total deposit is $1800.0816

But, we are actually recording the 2000 that we received from the customer less than $200.0823

We can go ahead and click Save and close, and it brings us back to our Home screen.0827

We can look at how that displays by going into our Chart of Accounts by Lists, Chart of Accounts.0835

Looking at our Checking Account, and looking at that Deposit of $1800, we can edit that and look at the details that "Oh, there is the $200 cash back".0846

OK, from our Chart of Accounts, we can also see that there is petty cash, and we can look at that, double click on that item.0858

And it will show the $200 deposit of cash to our petty cash. We can click on that, hit Edit transaction.0866

It will show us where that came from, that particular deposit from Jacobson check.0873

So, now, we understand how we can get cash back from a deposit.0884

Again, I recommend that we make the deposit and then, make it clean by writing us up a check so we can have it a little clean.0886

Some individuals might differ on that opinion. That is my opinion.0894

I like to make transactions a little more clean for our accounting records to understand.0898

Again, thank you very much for visiting Educator.com. We will see you next time.0903