Firms will often deposit multiple checks or cash payments to the bank on the same day. Even though these transactions are applied to CARET Legal's registers separately, they can be batched together into a single deposit and reflected as one transaction.
This process makes reconciling easier when you are ready to mark those transactions as cleared.
This article covers:
The Solution
Undeposited Funds (Banks and Registers) - A temporary holding account for deposits to be recorded into when you take in a payment. That payment can be batched and transferred to the appropriate Operating Account.
Setup
First. create a new Bank Account called Undeposited Funds. This can be done for each Bank Account that will be receiving multiple checks/charges to be deposited or you can also create a single undeposited funds account. Post all invoice payments and general deposits there, to later be distributed to the correct bank account.
This account can even mimic your desk drawer or a folder where you may use to hold onto checks until you are ready to go to the bank.
- Click the Accounting icon in the navigation bar to open the Accounting section, then select the Bank & Registers tab.
- Select the View Bank & Credit Card Accounts filter under the green action bar.
- Click + and select New Bank Account from the drop-down list.
- In the New Bank Account modal that appears complete the required fields indicated by a purple bar. Select Undeposited Funds from the Bank Account Type drop-down list.
Process
When payments/general deposits are made to CARET Legal, instead of selecting the actual Bank Account that the check/cash will be deposited to, select the Undeposited Funds Bank Account for that Bank Account.
Those deposits accumulate on the register for the Undeposited Funds Account instead of showing as individual deposits in your Operating Account Register.
Those deposits accumulate on the register for the Undeposited Funds Account instead of showing as individual deposits in your Operating Account Register.
When you are ready to deposit these payments at the banks:
- Select Generate Batch Deposit under the Banks & Registers tab in the Accounting section.
- Select Undeposited Funds Account from the drop-down list in the From Account field, and the Operating Account they are being deposited to as the To Account.
- Then select the checkboxes beside the payments that will deposited as part of this batch.
This removes the funds from your Undeposited Funds Account, and shows as a total deposit in the Operating Account.
***Note:
Undeposited Funds can only be used for Checks and Cash Deposits. It cannot be used when the Payment Method selected is Credit Card.
Undeposited Funds can only be batch deposited to and Operating account. You cannot use Undeposited Funds for Retainer or Trust Payments.
Any Retainer payments must be assigned to the appropriate Trust or Operating account individually for reporting purposes. Each client ledger requires the deposits to be separated by matter, not in a batch.