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M
Moreofu
March 28, 2020
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How to record bank deposits that are not income?

  • March 28, 2020
  • 2 replies
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We have an account we use specifically for wires from clients. When doing reconciliation, how would I categorize the incoming wires? They are not considered income, so would they be considered a client expense? 

Best answer by Rasa-LilaM

Thanks for adding more details about the issue, @Moreofu.

 

The negative balance showing on the Profit and Loss Report indicates the transaction is tracked as an income rather than an expense. To ensure your records are in order, I suggest reaching out to an accountant. 

 

They can provide recommendations on how to account for the wire deposits (settlement check for clients and payments for services). Visit this page and then enter your city or location to help find an accountant:

ProAdvisor.

 

Once the information is available, you can always get back to this thread and tag my name. This way, I can assist further on how to input the bank deposits.

 

I’m also inviting you to visit the QuickBooks Resource Center. The site contains articles and tools to help grow and manage your business.

 

Looking forward to your reply. Thanks in advance. Have a great rest of the day.

2 replies

Rubielyn_J
Rubielyn_J
March 29, 2020

Welcome here at Community @Moreofu.

 

It depends on you if you will consider it as a client expense. 

 

I suggest reaching out to your accountant if it could be considered as client expense.

 

 If so, you can record it as a billable expense that is a feature of QuickBooks Online Plus and Advance by turning on the billable expense feature.

 

Here's how:

  1. Go to the Gear icon ⚙.
  2. Choose Account and Settings.
  3. Click the Expenses tab.
  4. From the Bills and expenses section, choose Edit ✎.
  5. Put a checkmark first three boxes, and make sure to uncheck the Track billable expense and items as income.
  6. Click Save, then Done.

 

Once done, you can follow the steps below to enter a billable expense:

  1. Click (+) New button.
  2. Choose the transaction you want to create.
  3. Select the payee.
  4. In the Category column, choose the expense account for the transaction.
  5. Enter the description and amount of the expense.
  6. Put a mark in the Billable checkbox.
  7. Select the customer you want to bill for the expense in the Customer column.
  8. Click Save and Close.

 

I've included an article that will guide you in handling financial reports: Run reports in QuickBooks Online.

 

Feel free to leave a comment below if you have additional questions. I'd be glad to help you as soon as I can. Thank you!

 

 

 

 

 

 

M
Moreofu Author
March 29, 2020

I do consider them as a client expense. My question is, why is it when I enter the deposits as a client expense does my P&L reflects a negative balance?

R
Rasa-LilaMAnswer
March 29, 2020

Thanks for adding more details about the issue, @Moreofu.

 

The negative balance showing on the Profit and Loss Report indicates the transaction is tracked as an income rather than an expense. To ensure your records are in order, I suggest reaching out to an accountant. 

 

They can provide recommendations on how to account for the wire deposits (settlement check for clients and payments for services). Visit this page and then enter your city or location to help find an accountant:

ProAdvisor.

 

Once the information is available, you can always get back to this thread and tag my name. This way, I can assist further on how to input the bank deposits.

 

I’m also inviting you to visit the QuickBooks Resource Center. The site contains articles and tools to help grow and manage your business.

 

Looking forward to your reply. Thanks in advance. Have a great rest of the day.

M
mazar
March 29, 2020

Hello,

 

What are these wires for if they are not income?  Are they deposits or retainers?  If so, then you can offset a liability account because that money isnt yours till you have earned it.  Or, if you offset Accounts Receivable and make sure your customer name is on the transaction, it will create a credit in their account that can be used to offset future invoices.

 

It all depends on WHAT that money is for. Why are you getting that wire in the first place? Once you answer that, it will give you a better idea of what account should be offset by the deposit.

M
Moreofu Author
March 29, 2020

I work for a law firm which handles personal Injury and Corporate law. So some of our wires deposits are settlement check for clients and payments for services for my attorney's. 

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