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How Do I Reduce the Cash In My Cash Drawer To Deposit the Funds In My Bank Account?

Chief Mechanic · August 28, 2010 ·

To reduce the amount of cash in your cash drawer and deposit the funds in your bank account, you need to record a cash drawer payout.

If you have POS integrated with QuickBooks financial software, it’s valuable to understand how cash in a cash drawer is accounted for in QuickBooks. Cash payments from customers are recorded in the Cash in Drawer which is connected to a balance sheet bank account in QuickBooks. When you update QuickBooks financial software by clicking on the Financial->Update QuickBooks menu selection, cash transactions are recorded in the balance sheet bank account you specify in your POS company preferences. To verify this setting, click on the Advanced tab of the Financial->Accounts sub-menu on the Edit->Preferences->Company menu selection.

By default, POS sets this balance sheet bank account to Cash in Drawer, as shown in the screenshot below.

QuickBooks POS 8 Company Preferences Cash In Drawer

If you need to change this account setting, choose a valid QuickBooks bank account and save your change by clicking the Save button.

Reducing the amount of money in your cash drawer by recording a payout will:

  • reduce the balance of the balance sheet bank account recorded for that preference by entering a credit to that account
  • enter an equal, offsetting debit to an account you specify when you record the payout

To prepare to deposit funds from a cash drawer into your bank account, you’ll normally choose to debit your Undeposited Funds account, provided you are have the Use Undeposited Funds as a default deposit to account preference turned on in QuickBooks. If you don’t have that preference turned on (which we do not recommend), you’ll choose to debit the bank account into which you’ll deposit the funds from the cash drawer. See our related article for more information on the purpose of the Undeposited Funds account.

For the remainder of this discussion, we’ll assume that the Use Undeposited Funds as a default deposit to account preference is turned on in QuickBooks, and that you’re using the default balance sheet account, Cash in Drawer.

To record the payout, click on the Point of Sale->New Payout menu selection. Enter the Cashier, the Amount (which is the amount you are removing from the cash drawer to deposit into your bank account), and Comments. Choose Undeposited Funds from the Account list and click Ok.

QuickBooks POS 8 Cash Payout Undeposited Funds

When you next update QuickBooks financial software from POS, your balance sheet account Cash in Drawer will have been reduced by a debit in the amount you recorded as a payout, and Undeposited Funds will be increased by a debit in that same amount.

Click on the Banking->Make Deposits menu selection to actually include this cash on a regular bank deposit.

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What Are Payment Methods?

Chief Mechanic · August 23, 2010 ·

As the name suggests, Payment Methods are a list of the ways by which a customer can make a payment. They’re maintained on the Lists->Customer & Vendor Profile Lists->Payment Methods menu selection as 1 of 9 profile lists for Customers & Vendors. This particular profile list is only used for Customers.

QuickBooks Enterprise Solutions 10 Payment Methods

A Payment Method can be one of 11 pre-defined Payment Types:

  1. Cash
  2. Check
  3. American Express
  4. Discover
  5. MasterCard
  6. Visa
  7. Other credit card
  8. Other
  9. Debit Card
  10. Gift Card
  11. E-Check

These Payment Types are part of the QuickBooks program itself and can’t be maintained by a user.

The Customer’s Payment Method is specified on the Receive Payments and the Enter Sales Receipts windows, and payments are grouped by Payment Method on the Payments to Deposit window if you’ve opted to use the Undeposited Funds account.

If you have a lot of payments to deposit, you can opt to the filter the items on the Payments to Deposit window to only include 1 particular Payment Method. Therefore, you should create Payment Methods that match the way your customer payments are grouped into deposits.

QuickBooks Enterprise Solutions 10 Make Deposit Payment Methods

You can also specify a customer’s Preferred Payment Method on the Payment Info tab of the Edit Customer window.

QuickBooks Enterprise Solutions 10 Customer Preferred Payment Method

Payment Methods primarily serve the function of grouping related items on a deposit, so your firm’s approach to bank deposits should drive the methods you create and maintain on this list.

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