# How do I record a bank deposit in my accounting software?

Applies to: United States · Updated 2026-09-25

Record one deposit for each credit the bank shows, dated the day the money went into the bank and totalling exactly what the bank credited. Apply each customer payment to the invoice it settles first; if several payments were banked together, hold them in a holding account and group them into one deposit. Add a line for any other money, a negative line for anything withheld, and check the total against the slip or statement.

## What does a deposit record represent?

A deposit record is the bank's side of the story: the money that went into the account at one time, in the single amount the bank credited. It is a different event from the receipts inside it. Two customer checks and some cash handed over on one slip are three receipts but one bank credit, and the statement shows only that one figure. The deposit is recorded when the money reaches the bank, and it gathers those receipts into one figure.

So the deposit mirrors the bank, not the receipts. The video walkthrough in Intuit's article on recording bank deposits in QuickBooks Online calls it the key to the whole process that the deposit in QuickBooks is for the exact same amount as the deposit on your bank statement.

## What kind of money are you depositing?

What each piece of money is decides the account it posts to and whether a step comes before the deposit:

| If the money is | Record it this way |
|---|---|
| A customer payment that settles an invoice you issued | Apply it to the invoice, then group the applied payment into the deposit |
| Income with no invoice behind it | A sales receipt held for the deposit, or a line on the deposit against an income account |
| Money that is not income, such as an owner's contribution, a loan advance or a refund of an expense or check recorded without a bill | A line on the deposit against the equity, liability or expense account it belongs to |

Two kinds of incoming money are handled elsewhere. Money moved in from another account the business owns is not new money entering the business; it is a transfer between your own accounts, which has its own guide. A customer paying before the work is done is a customer deposit or retainer, which also has its own guide.

## How does a customer payment move from the invoice to the deposit?

When several customer payments go to the bank together, each one passes through three steps, in this order:

1. **Apply the payment to the invoice.** In QuickBooks Online, open Receive payment and choose the customer. Intuit's help on recording invoice payments says to select the checkbox for each invoice you are recording a payment for, and that if this is a partial payment, you can change the payment amount.

   Saving it applies the payment: the same invoice-payments article says the invoice status updates and the customer's outstanding balance decreases accordingly.
2. **Hold it for the deposit.** In the Deposit to field, choose Undeposited Funds. Intuit's invoice-payments article describes it as a temporary account that holds payments you plan to deposit later at the bank.
3. **Group the held payments into one deposit.** Create a bank deposit and, as Intuit's article on recording bank deposits puts it, select the checkbox for each transaction you want to combine.

Intuit's invoice-payments article gives a different payment procedure for QuickBooks Solopreneur, and Intuit's bank deposits article says customers can't be added to deposits in QuickBooks Ledger.

The holding account exists because the money has been received but is not yet in the bank. That is what lets the receivable fall on the day the customer pays while the bank balance rises on the day the money is banked.

Do not skip the first step by coding the bank credit straight to an income account. The invoice has already recorded the sale as income. AccountingCoach's explanation of the accounting equation makes the point with customers paying amounts billed earlier: there are no revenues on the day they pay, because the revenues were recorded when they were earned. A deposit coded to income counts the sale a second time, and because no payment was applied, the invoice still shows as unpaid.

If the bank credits one payment on its own, the holding step is optional. Intuit's invoice-payments article says to use Undeposited Funds only if your bank combines several payments into one deposit, and otherwise to skip it and select your bank account, so the payment itself becomes the record the bank's credit meets.

### What does the flow look like from invoice to bank credit?

This example assumes a sole proprietorship, because it includes money the owner put in. On May 12 the business invoices Harbor Cafe for 1,200.00 and Linden Studio for 800.00. Harbor pays by check on May 27 and Linden on May 28; both payments are applied to their invoices and held in Undeposited Funds. On May 28 a walk-in customer pays 150.00 in cash, recorded on a sales receipt held there too. On May 29 the owner takes both checks, the 150.00 in cash and 500.00 of personal money to the bank on one slip, and the statement shows one credit of 2,650.00 that day.

| Date | Step | Account | Debit | Credit |
|---|---|---|---|---|
| May 12 | Invoices issued | Accounts receivable | 2,000.00 | |
| May 12 | Invoices issued | Sales income | | 2,000.00 |
| May 27–28 | Payments applied | Undeposited Funds | 2,000.00 | |
| May 27–28 | Payments applied | Accounts receivable | | 2,000.00 |
| May 28 | Cash sale | Undeposited Funds | 150.00 | |
| May 28 | Cash sale | Sales income | | 150.00 |
| May 29 | Deposit | Business checking | 2,650.00 | |
| May 29 | Deposit | Undeposited Funds | | 2,150.00 |
| May 29 | Deposit | Owner's capital (equity) | | 500.00 |

Accounts receivable falls on May 27 and 28, when the payments are applied, and income is recorded once, on the invoices and the sales receipt. Between receipt and banking, 2,150.00 waits in Undeposited Funds; the deposit empties it and adds 2,650.00 to checking, the figure the bank shows. Debits and credits each total 6,800.00.

## How do you add money that is not a customer payment?

Money that is not settling an invoice needs no earlier step. It goes onto the deposit as its own line, beside any customer payments. In QuickBooks Online that is the Add funds to this deposit section of the bank deposit; the video walkthrough in Intuit's bank deposits article says you can include any additional deposits in this section. Each line needs the account the money belongs to and the amount.

Choose the account by what the money is:

- **Money the owner invests in the business.** Post it to an equity account, never to income. Which one depends on how the business is organized: AccountingCoach's accounting-equation example for a sole proprietorship records the owner's investment in an owner's capital account (J. Ott, Capital). For a corporation, partnership or LLC, use the equity account your accountant has set up for owner contributions.

  If the owner may be lending the money rather than investing it, ask your accountant which it is and how to record it.
- **A loan advance.** Post it to a liability account for the loan. AccountingCoach's accounting-equation explanation records a bank loan in the asset account Cash and the liability account Notes Payable, and says the proceeds of the loan are not considered to be revenue.
- **A refund of an expense or check you recorded directly (not through a bill).** Post it back to the account the original cost went to. Intuit's article on entering vendor credits and refunds in QuickBooks Online records a refund for an expense or check as a bank deposit, using the same category or account used for the original expense.

  The same article says the method depends on how you recorded the purchase: if you entered it as a bill, follow its steps for a refund of a paid bill instead.
- **Income with no invoice behind it.** Post it to the income account it belongs to, or record it on a sales receipt and hold it for the deposit. Intuit's article on managing the Undeposited Funds account says that account holds invoice payments and sales receipts you want to combine before taking them to the bank.

  A line on the deposit takes the deposit's date. If the money came in on an earlier day, especially in an earlier month, record it on a sales receipt dated the day you received it and hold it for the deposit.

## How do you record an amount the bank or processor kept?

If the bank credited less than the receipts because a fee came out first, the deposit has to carry the difference as its own line. Recorded at the gross amount, the deposit sits above the bank's credit, and the fee never reaches the books as a cost. Intuit's article on recording bank deposits says to enter the fee as a line item in the Add funds to this deposit section and to enter the amount as a negative number.

Post that line to an expense account. AccountingCoach's explanation of bank reconciliation records a bank service charge that reduced the account by crediting cash and debiting an expense such as Bank Fees Expense, and a processing fee withheld from a payout is the same kind of cost.

When receipts come through a payment processor that pays out in batches, net of its fees and later than the customers paid, the deposit is built the same way. That applies to payments taken outside QuickBooks. Intuit's bank deposits article says QuickBooks Payments automatically processes and moves transactions into your accounts, and Intuit's invoice-payments article says the Deposit To dropdown does not appear for payments processed through a merchant account, so don't build a second deposit by hand for those payouts. Apply each payment on the day the customer paid, date the deposit the day the payout reached the account, and add a negative line for the fees shown on the processor's payout or settlement report. If the payout is short by more than those fees, don't widen the fee line to close the gap. The rest is something else, a refund for example. Working out which sales, fees and refunds make up a payout is a separate job, which has its own guide.

### What does a payout net of fees look like?

Three customers pay open invoices by card through a processor outside QuickBooks: 450.00 on June 2, then 325.00 and 600.00 on June 3. Each payment is applied to its invoice and held in Undeposited Funds, 1,375.00 in all. The processor keeps 41.25 in fees and pays 1,333.75 into the business checking account on June 5. The deposit, dated June 5, has these lines:

| Deposit line | Amount |
|---|---|
| Payment applied to invoice, June 2 | 450.00 |
| Payment applied to invoice, June 3 | 325.00 |
| Payment applied to invoice, June 3 | 600.00 |
| Processor fees, bank charges and fees expense | -41.25 |
| Deposit total | 1,333.75 |

Its effect on the ledger:

| Account | Debit | Credit |
|---|---|---|
| Business checking | 1,333.75 | |
| Bank charges and fees | 41.25 | |
| Undeposited Funds | | 1,375.00 |

The deposit equals the payout to the cent, the fee is recorded as a cost, and Undeposited Funds falls by the full 1,375.00 the customers paid. Recorded at 1,375.00, the deposit would sit 41.25 above the bank's credit, and the gap would surface again at reconciliation.

## Which bank account and date should the deposit carry?

Choose the account the money actually went into; a business with several accounts picks the one whose statement shows the credit. Intuit's article on recording bank deposits has you choose the account you want to put the money into.

Date the deposit the day the money went into the bank, not the days the payments were received. The video walkthrough in Intuit's bank deposits article says you can enter the date that the deposit took place. AccountingCoach's explanation of bank reconciliation says the bank records a deposit with the date the bank processes it. If that falls after the day you made the deposit, Intuit's walkthrough does not say which date to use; when the two fall in different months, ask your accountant before you close the month. The receipts keep their own dates. A check received on June 30 and banked on July 1 settles its invoice in June and reaches the bank in July, so June closes with it in Undeposited Funds, which is correct: on June 30 the money was in hand, not in the bank. Dating the deposit June 30 puts it in the wrong month and leaves it a day away from the bank's July 1 credit.

Currency and checks banked together work the same way. Record each check against its invoice and each cash sale on its sales receipt as it comes in, and hold them all in Undeposited Funds until banking day. Then select only the items that are on the slip, so the deposit equals what the bank credits. Anything left in the drawer stays in the holding account for the next deposit.

## What paperwork should back the deposit?

The deposit slip, or for a processor the payout or settlement report, is what shows what a grouped deposit contains. The statement shows one figure, and the composition cannot be rebuilt from it later. Intuit's article on recording bank deposits works from the slip: it has you confirm the total of the selected transactions matches your actual deposit slip.

Keep that document with the deposit. Attach a scan to the deposit record if your software allows attachments there, or file it where it can be found from the deposit's date and total, and note the slip number or payout reference in the deposit's memo if it has one.

## How does the recorded deposit meet the credit from the bank?

The bank's credit reaches your books again, through the bank feed or the statement, and it should be paired with the deposit you built rather than recorded a second time. So the deposit has to carry exactly the amount the bank credited, which Intuit's bank deposits walkthrough calls the key to the whole process.

That is why composition matters. If each receipt is recorded as its own deposit while the bank shows one credit, the books hold several items against one, and none of them matches. If the bank shows each receipt as a separate credit, record separate deposits to match. Pairing a downloaded credit with the deposit is its own task, with its own guide.

## How do you correct a deposit you already recorded?

Open the deposit and change what is wrong, knowing where its contents go:

| If you need to | What happens |
|---|---|
| Take one customer payment out of the deposit | Uncheck it. Intuit's bank deposits article says the payment will go back to the Undeposited Funds account, and you can add it to another deposit. |
| Delete the whole deposit | Intuit's bank deposits article says all payments on the deposit go back to the Undeposited Funds account. |
| Change or remove a line that is not a customer payment | Edit or delete the line and save, then compare the new total with the bank's credit again. |

Removing a deposit does not remove its payments. They still exist, waiting in the holding account, where they are easy to forget. Intuit's bank deposits article speaks only of payments, so before you delete a deposit, note any lines entered in Add funds to this deposit, such as owner money, fees or refunds, to enter again on the new one. After any removal, build the corrected deposit straight away, or confirm the payments are meant to wait for a later one.

If the deposit falls in a period you have already reconciled, decide first whether the deposit itself is wrong. Intuit's article on fixing beginning balance issues when reconciling lists a reconciled transaction that was edited, deleted, voided, moved, or unreconciled as a cause of those issues, and says this changes the ending balance of your last reconciliation and sets the beginning balance for the next one. Correct a genuine error, then expect to revisit that reconciliation. Repairing the reconciliation itself belongs to the guide on reconciling to the statement.

## How do you check that the deposit worked?

After saving, look in three places:

- **The bank register.** The deposit appears once, on the date it was banked, for the amount on the statement. Intuit's bank deposits article also points to the Deposit Detail report, which it says lists all your completed bank deposits.
- **The invoices.** Every invoice the payments settled should show as paid, not open. That status comes from applying the payment, not from the deposit, so an invoice still open for its full amount means the first step was missed; one paid in part stays open for the rest.
- **The holding account.** Undeposited Funds should hold only payments you have received but not yet banked. To list them, go to All apps, then Accounting, then Chart of accounts, find Undeposited Funds and choose Run report from the Action column.

  Intuit's article on running an undeposited fund report says it covers a default period of 90 days, so widen the Report period to catch older stuck payments. Anything older than your last trip to the bank is either still in the drawer or missing from a deposit.

A holding balance that keeps growing is the standing sign that this workflow is going wrong. Either payments are applied but never grouped into deposits, or the bank credits were recorded separately, often straight to income, which also counts that income twice. In the first case, add each payment to the deposit that actually contained it. In the second, the separate record duplicates the income, and removing duplicate deposits has its own guide.

## Sources

1. Intuit Inc. — *Record invoice payments*, Updated 8/3/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/invoicing/record-invoice-payments-quickbooks-online/L4ZadDW7F_US_en_US
2. Intuit Inc. — *Record and make bank deposits in QuickBooks Online*, Updated 8/3/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/bank-deposits/record-make-bank-deposits-quickbooks-online/L2BBZOPdr_US_en_US
3. Intuit Inc. — *Managing your Undeposited Funds account*, Updated 8/3/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/bank-deposits/whats-undeposited-funds-account/L6Jan3iRK_US_en_US
4. Intuit Inc. — *Run an undeposited fund report*, Updated 8/5/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/sales-reports/create-report-total-undeposited-funds/L0UpGtWSs_US_en_US
5. Intuit Inc. — *Enter vendor credits and refunds in QuickBooks Online*, Updated 9/15/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/vendor-credits/enter-refund-vendor/L2y1KARni_US_en_US
6. Intuit Inc. — *Fix beginning balance issues when reconciling in QuickBooks Online*, Updated 9/1/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/statement-reconciliation/fix-issues-accounts-reconciled-past-quickbooks/L8lx6PQQ5_US_en_US
7. AccountingCoach (Harold Averkamp, CPA) — *Accounting Equation: In-Depth Explanation with Real-World Examples*, undated. https://www.accountingcoach.com/accounting-equation/explanation
8. AccountingCoach (Harold Averkamp, CPA) — *Bank Reconciliation: In-Depth Explanation with Real-World Examples*, undated. https://www.accountingcoach.com/bank-reconciliation/explanation

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