Combining Multiple Invoice Payments into Single Split Deposit Causing Problems

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I always mark invoices as paid from the invoice "Form..." screen so that they are marked paid/cleared in the Invoices register. However, I've noticed over time that despite this fact, I still see random older invoices in my list of outstanding unpaid invoices even when I know they were previously cleared. I finally traced the problem to invoices that were part of a split bank deposit.

For example, I issue Invoices A, B, C & D. Payments for A & C come in the same day and are deposited at the bank in one transaction. When reconciling with my bank statement, I choose to identify those two payments as part of the one deposit transaction at the bank (combining the two into a split deposit record). Thereafter, the two invoices previously marked paid now show in my invoices register as NOT cleared and become options again in my outstanding invoices next time I receive a payment from that customer.

That is annoying but I have been working around it. Another related problem I discovered which is much harder to deal with is these transactions do not appear in Cash Flow reports with their original categories assigned. E.g. if I have an invoice with category "Consulting" and it's paid and deposited by itself, it appears in reports under "Consulting". If it is combined as part of a split deposit, the category information is lost and it doesn't appear on the cash flow report at all. Help!!

Thank you in advance,
Brad

Best Answer

  • NotACPA
    NotACPA SuperUser ✭✭✭✭✭
    edited January 2020 Answer ✓
    Create a new banking type account.  I call mine "Undeposited Checks".
    Direct the invoice payments to that account.
    Show the deposit into your real bank as a Transfer from 'Undeposited Checks".
    Just be sure that, after such deposit, that the balance in "Undeposited Checks" is $0.
    Think of this new account as being your desk drawer, your safe, under your mattress or wherever you actually keep the checks until you do deposit them.
    [EDIT] BTW, this is the default process in Quickbooks.  I have no idea why Q hasn't also implemented it as the default. [/EDIT]

    Q user since February, 1990. DOS Version 4
    Now running Quicken Windows Subscription, Business & Personal
    Retired "Certified Information Systems Auditor" & Bank Audit VP

Answers

  • NotACPA
    NotACPA SuperUser ✭✭✭✭✭
    edited January 2020 Answer ✓
    Create a new banking type account.  I call mine "Undeposited Checks".
    Direct the invoice payments to that account.
    Show the deposit into your real bank as a Transfer from 'Undeposited Checks".
    Just be sure that, after such deposit, that the balance in "Undeposited Checks" is $0.
    Think of this new account as being your desk drawer, your safe, under your mattress or wherever you actually keep the checks until you do deposit them.
    [EDIT] BTW, this is the default process in Quickbooks.  I have no idea why Q hasn't also implemented it as the default. [/EDIT]

    Q user since February, 1990. DOS Version 4
    Now running Quicken Windows Subscription, Business & Personal
    Retired "Certified Information Systems Auditor" & Bank Audit VP

  • argueb
    argueb Member
    Thank you, NotACPA. Great idea...though I wish this work-around wasn't necessary, obviously.

    Is the feeling that this is a "bug" that needs to be corrected (and will be eventually)? Or, is the fact that Quickbooks works as you indicate a signal that this is how it is intended to work and maybe just an oversight that it's not more clearly communicated to people that they need to use it as you suggest?

    Thanks again.
  • RandyP
    RandyP Member ✭✭✭
    If your bank supports it, make mobile deposits. When you do it that way, all deposits are logged separately, and they are immediately reflected as such in the account register within minutes of making the deposit.

    When you receive a customer payment:
    Mobile - (each payment is a separate transaction)
    1. (if possible) Make a mobile deposit of the check.
    2. Manually enter the deposit into the account register making sure the payee name matches the name on the invoice. Do not enter a check number. Mark the transaction as a transfer to the invoice account.
    3. In the invoice account, locate the payment you just recorded and enter the invoice number to which the payment applies. Be sure the payee name is correct.

    Bank deposit (multiple payments as a single deposit)
    1. Follow #2 and #3 above.
    2. To record additional payments, locate the transaction in the deposit account's register that will be included in the deposit.
    3. Split the deposit. In the Split Transaction window, enter subsequent deposits.
    4. In the invoice account register, be sure the invoice number and payee name are accurate. If the invoice number or payee name for a payment does not match the invoice number and payee name on the invoice, the payment will not be applied.

    The invoice should show as paid. Later, when you update the accounts and download new transactions, you should get a message telling you there are payments that need to be matched to manually-entered transactions. Follow the steps to match them and the downloaded transactions will replace the manually-entered transactions and the invoices will remain paid.

    Hope this helps.
  • argueb
    argueb Member
    Thanks for your reply, Randy. I am not able to do mobile deposits given the size of some of the checks and limitations with my bank's mobile deposit process. I need to walk through your second suggestion step by step to be sure, but I'm pretty certain that's exactly what I've been doing and it has not worked for me.
  • Greg_the_Geek
    Greg_the_Geek SuperUser ✭✭✭✭✭
    It's much easier to use the "Undeposited Checks" account. I speak from experience having had my own business for the last 17 years.
    Quicken Subscription HBRP - Windows 10
  • volvogirl
    volvogirl SuperUser ✭✭✭✭✭
    Using an intermediate holding account is not a work around.  It is the proper way to record them.  And then you can record the checks on the dates you actually got them, not just when you make the deposit.  Which is better at year end.

    I'm staying on Quicken 2013 Premier for Windows.

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