How to Enter Cash Back Deposits in QuickBooks
My client receives payment from his client. This payment pays his home rent expense. Normally he takes the check to the bank and cashes it and then pays his landlord in cash. The payment is never recorded in QuickBooks, however, at the end of the year when he gets the 1099, the income is entered as one lump sum.
I am trying to change this so that he lets me know when he receives payment so that I can post it in QuickBooks. The question I have is, if he uses the payment to pay for his rent……..how do I record it?? The rent is not business, it is personal. Should the withdrawal be shown as owner’s draw?
However, I strongly urge you not to enter these payments directly on the deposit. Instead, you should enter a sales receipt so you get better customer information in QuickBooks. You could create a $0 sales receipt by creating an other charge item mapped to the owner’s draw account and entering a negative amount offsetting the payment received.
This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice. For further information, please consult appropriate professional advice from your attorney and certified public accountant.