Recording a cash payment correctly in QuickBooks Online (QBO) is essential to maintaining accurate records. Here’s a step-by-step guide on handling cash payments and expenses in QBO.
Step 1: Record the Cash Payment
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Locate the Invoice
- Find the client’s invoice for the payment.
- Confirm that the invoice amount matches the cash payment received.
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Receive the Payment
- Click on Receive Payment from the invoice screen.
- For the Payment Method, select Cash.
- In the Deposit To field, choose your Cash Account.
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Verify the Transaction
- Navigate to your Cash Account Register.
- Confirm that the payment appears in the register and that the amount matches the physical cash you’ve received.
Step 2: Record Cash Expenses
If you use the cash to pay for business expenses, you’ll need to record these transactions to keep your books accurate.
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Go to the Cash Account Register
- Navigate to your Cash Account in QBO.
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Record the Expense
- Click Add Expense or Write Check, depending on the type of transaction.
- Enter the following details:
- Payee: The name of the vendor or recipient of the cash payment.
- Category: Select the appropriate expense category for the transaction.
- Amount: Enter the amount spent.
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Save the Transaction
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- Verify that the expense is recorded in the cash account.
Why Use the Cash Account?
You create a clear audit trail by depositing cash payments into the cash account and recording expenses directly from it. This process ensures your financial records remain accurate and organized, even for cash transactions that don’t appear in your banking feed.
With these steps, you can confidently handle cash payments and cash expenses in QuickBooks Online. If you need further assistance, feel free to contact us!