Regardless of what QuickBooks software or online version you are using, you are bound to run into this fork in the road: how do I know whether to create a sales receipt, receive a payment or make a bank deposit? These three options are readily available to you, but unless you are a QuickBooks Pro (and sometimes even if you are), knowing which option to choose can be perplexing. So, I’m going to walk you through these three options to further explain what they are for and when they should be used.

When you use receive payments, you are applying a payment to something that has already been invoiced or billed. I provided a service or product to you, sent you an invoice, and then you paid it. There’s a length of time in between these two tasks. Invoice then payment. Only use receive payments if you will be applying the payment to an invoice.

So, how are sales receipts different? Think of a sales receipt like walking into a department store. When you purchase something there is no invoice created, only a receipt. This is because there was no expectation that you were going to buy anything when you walked in the door. In the case of your business, this may mean someone buys something on the spot so there’s no need for an invoice. A sales receipt combines an invoice and payment into one transaction. If a customer pays for something before you’ve had a chance to create an invoice, save yourself a step and use a sales receipt.

Now, think about your bank statement for a moment. When you see cash/check deposits made, do they show up as each individual payment or do they show up as one large lump sum? They will almost always be added as one lump sum. So, how do we make that lump sum match each individual payment or sales receipt we’ve created? We’ll create a bank deposit!

When creating a bank deposit, you will notice two very distinct sections:  A section that shows each payment and sales receipt you just created (if you’re not seeing these payments and receipts, you may have listed the ‘deposit to’ account as the bank account instead of undeposited funds…go back to those payments/receipts and make changes as necessary) as well as a second section below with blank lines.  

You will click each of the individual payments and sales receipts that are making up the deposit. The lines below are meant to record any loose change or funds coming in that don’t necessarily need to be recorded by customer. An example might be ticket sales. Maybe you’ve collected $500 by selling tickets to an event you’re putting on, but it’s not important to know exactly who bought tickets or how many. Instead of doing a sales receipt for each individual ticket sold, just add the total of the sales, select the proper income account (ticket sales in this example) and then add the total.

When all is said and done, the total deposit will be all payments & sales receipts plus any other funds coming in that aren’t being tracked by customer. This amount should match what will end up on the bank statement.

Stay tuned for more tips and tricks!  Want to know something specific?  Reach out to us!