Why do I have to match deposits?

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Introduction

You must match deposits from your bank with QB orders. Otherwise, the income is recorded twice. Your merchant account fees will be missing, so you are taxed on an expense.

How do payment processors work?

When you are paid online, a payment processor collects the funds and holds them in a staging area. They usually deposit on a two day schedule. All of Monday's sales are direct deposited into your bank account on Wednesday. Most processors take a commission of about 3% on each order, before they deposit. You must add these fees as an expense, so you pay no taxes on them. To add fees, you must match them to a group of orders and deposit from your bank.

How do I connect my bank account to QuickBooks?

QuickBooks has a copy of your bank account's withdrawals and deposits. Bookkeepers and Accountants match the bank account and the QB register. You can view this account by clicking the gear box and selecting chart of accounts. Here is a screenshot of a bank register:

register.png

Without adding your bank feed, you must add the withdrawals and deposits one by one. To add the bank account feed, here are the steps:

  1. Log into QuickBooks.
  2. On the left, click banking.
  3. Follow the on-screen instructions to add a bank account. You should see a button saying nothing has been added, if you are a new user. Otherwise, click add account.

QuickBooks will populate a list of deposits and withdrawals from your bank account. You will be asked to accept these transactions. Once you accept, they are moved to your bank account. Here is a sample deposit to match:

register2.png

What is this deposit that QB matched?

In this image, you see match deposit. We have already created a deposit manually before connecting the bank account, so we can show you the process. The amount and date in your register is the same as your bank. If you click deposit, you will see this screen:

dep_screen2.png

Without Cloud Cart's match deposit tool, you must locate the orders matching the $3,114.98 deposit. Then, add the fees at the bottom. Cloud Cart records the gross sales without merchant processor fees. You can pull a settlement report from your payment processor to locate the fees and matching orders. 

Why do I have to match deposits?

If you click accept without matching, QuickBooks will add the $3,114.98 to your bank register. QuickBooks also has the sales, so your income would be reported twice. In QB, go to reports and click profit and loss. You will see an extra $3,114.98 in your sales account. Without matching, no merchant fees are recorded and will be taxed on this expense.

Can Cloud Cart match deposits?

Cloud Cart can match deposits, depending on your payment processor. Cloud Cart can find matching orders in QuickBooks that match the deposit, then add fees. In the example, Cloud Cart could have located the orders matching the $3,114.98 deposit and added the $85.02 in fees. Instead, the deposit was done manually.

How do I get started with matching deposits?

Now that your bank account is connected, you have deposits to match. You can match deposits historically and move forward automatically. Here are the guides:

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