and now we will learn all about sales receipts and undeposited funds when do we give a sale
receipt well you don't have to be an attorney to know that you give a sale receipt when you
render a service and the customer or client pays immediately at the moment they pay nothing is
owed to or from the client that means that when you record a sale receipt in QuickBooks it will
not show up in the client balance detail when we record a sale receipt our income goes up because
we just rendered a service and when we record a sale receipt our money our cash just went up
otherwise we would not have given a receipt if we were not just handed cash however if we deposit
the money immediately or at least in the same day the cash and bank which is the account in
the chart of accounts that represents the money in the bank is the account that will go up at the
moment the income account goes up and usually we bring these types of checks to the banks to the
bank right away or we get a direct deposit then this way the bank account goes up at the moment
we record the bank account going up for example let's imagine on April 20 we did a twenty dollar
notary service for our good friend Allen RB he paid immediately with a direct deposit into our
bank account we have to reactivate this account in the chart of accounts as well as the items
list because this was something that we created on our items list as a service and in our chart
of accounts as another income account and we made them inactive so in order to be able to do that
we have to reactivate those accounts so if you remember we come here list chart of accounts and
if we click down here to see the inactive accounts we can see that income from notary services there
we just deactivated it where after we created it but all we have to is click on it and in
the bottom left click account make account active and the check mark disappears or the X disappears
now when we remove the check mark to include an active accounts we still see income from notary
service now we also have to reactivate it on the items list click list items list click the
include inactive to see all the inactive items then click here to reactivate the notary service
item make item active and the X goes away and now all items are active and we're ready to record
this sale receipt so again it's April 20 a $20 notary service for a land RV could not be more
simple from the main menu click customers enter sales receipts very good now it's a land RV the
date is April 20 very special day and make sure it's 2017 cuz that's the year we're doing this is
our first sale receipt and it was the item was not legal service rendered the item was notary service
and how much was it twenty dollars push tab but the most important thing you have to be careful
about is the transaction specifically said it was immediately deposited with the direct deposit into
the bank account that's what it says up here so we will not be using undeposited funds in
this case we will be using the chase bank account that's our operating account and that's where the
money goes after we perform a service when we click Save and close we can open up the trial
balance and we can see income from notary service shows up for the first time as $20.00 and if we
double click cash and Chase Bank to get all the transactions that were deposited in the bank we
can see that the most recent one down here at the bottom was this sale receipt that we just did now
if we have a similar transaction but we deposit the money later then it will not be the cash
and bank that will go up at the moment that we perform the sale receipt instead if we are handed
money that we will deposit several days later at the moment we give the service the name of the
account and the chart of accounts that goes up is called undeposited funds and it's a current asset
it's an account in the chart of accounts and it represents the money that we hold in our hand from
the customer that we will in the future bring to the bank on the day that we actually deposit the
money undeposited funds will then decrease because we don't have undeposited anymore on that day the
money will be in the bank and on that day the cash and bank will go up so let's take a look
at an example of that situation April 22nd we did a $30 notary service for Betty Boop and she paid
us immediately with check eight seven six five okay and that means that income from notary will
increase by thirty dollars and undeposited funds not cash and bank will increase by thirty dollars
let's take a look on how to do it here well it's the same sale receipt that you're going to make
customers enter sale receipt the date will be April 22nd the customer is Betty and the item
is the notary service and this time it's $30 rather than $20 but you have to be careful if
she gave us a check you have to make sure that you click check and you put in the check number check
number eight seven six five and because we got a check we have to make sure that the deposit - says
undeposited funds because the money on April 22nd is not in this bank account so if you put it there
it will not match the bank records you have to put it in undeposited funds because this cheque is in
your hand on April 22nd and you did not deposit the money on April 22nd save and close and let's
take a look the trial balance shows income from the notary is now $50 do you double click you
get both of these sales receipts because that's how we get our income from notary and you also
notice that our cash in bank has increased and if we double click the very last transaction is oh
Lord oh it's not in cash in bank why because it's in this account instead undeposited funds now in
this example there's another step a few days later we physically deposited the check that we got from
Betty into the bank account and when that happens undeposited funds will decrease by 30 dollars and
go back down to zero and the cash and bank will finally increase by that thirty dollars let's
take a look from the main menu click banking make deposit now when you click make deposit
two windows open up the first window is called the payments window and if you close it out you could
always reopen it by clicking here in the second window payments because you have to get through
this window first this window here is simply a list of every individual item that's still
sitting in undeposited funds you might use this other window separately from undeposited funds in
other situations and I strongly urge you to watch the supplemental videos in the area of banking
for banking situations that any company has not just a law firm but in this window payments to
deposit this is what's in undeposited funds we click the check mark on each individual
item that we're physically bringing to the bank and then we click OK and it puts it in the main
deposit window if we had any other things to deposit we would list them here but that's it
it's being deposited into this particular bank account on April 25th and this is the cheque
from the client or customer that we're depositing when we click Save and close we can see from the
trial balance look the undeposited funds has now gone down to zero it was 30 when we got the check
and then it decreased by 30 when we deposited the check and you can see the cash and bank the
very last item is this $30 on April 25th and it was a deposit that came from undeposited funds
now the deposit detail report is the best so we will open up the deposit detail report because any
time you deal with deposits that's the report to check reports banking deposit detail and if I push
a for all to get the results of all regardless of date you can see every single time our bank
account increased whether it be through a payment a sale receipt or a deposit that's listed here and
you will see if you have deposits where you deposit several checks at once this report
will help you through your bank reconciliation and one final note the supplemental videos show every
banking issue you and any other company would need and I urge you to take your time and go
through the banking videos to make sure you're comfortable with the topic congratulations you
have completed the course and if you remember and understand everything you are in expert in
QuickBooks and you have everything you need to keep books and records of any law firm