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Free Accounting Software Forum - Eftpos entries and Undeposited funds account

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I currently use MYOB first edge. I am a psychotherapist and I am paid at the end of each session by cash or debit/credit card.
So that my bookkeeper can more easily keep track of my eftpos transactions, when I enter the sales into myob, I put them into an account called undeposited funds. Then at the end of each day I prepare a bank deposit in myob which totals the eftpos takings for the day and puts them into my business bank account in myob. This means the eftpos deposits shown in my bank statements match my eftpos deposits into my bank account in myob.
My question is; is there a way I can do this in Free Accounting Software?
15/02/2012
Yes and No. Free Accounting Software does not directly replicate features in other accounting systems. So you have to consider the objective rather than the method. I'll give you 3 options and you can choose the one that suits you best:


Option 1 – my recommendation

This undeposited funds feature seems to be something that is allowing you to do 99% of the bank reconciliation and then pay a bookkeeper to do it all again. I think you would be better off to go the 1% further and do the full bank rec.

As a professional practice I suspect you have only a few payments each month. So if you just enter those payments you can do the full bank reconciliation with the same effort as you are now putting in to reconcile the undeposited funds. Here's how it would work:

1. You enter your Cash Received transactions just the same as you are now.
2. At the start of each day you print your bank statement for the previous day.
3. You enter any payments, including bank fees. (I suspect most days there are no payments).
4. You reconcile the bank account.

Note many people prefer to do bank reconciliations on a weekly, monthly or quarterly basis. It just depends on volume. I recommend doing it more often.

Reconciling the bank account is simple you just select the opening bank balance, the cash received through eftpos, the cash received that you deposited and payments if any exist. The only difference between a bank reconciliation and reconciling undeposited funds is that for the bank rec you reconcile to the bank statement amount rather than zero.

Advantages:
* Pick up and fix errors sooner.
* Save money on bookkeeping fees.


Option 2:

You just enter the Cash Received as normal. At the end of the day you group up the EFTPOS receipts on the bank reconciliation page without doing the full bank reconciliation. To do this click on Balance Sheet then click on Cash. Select all the amounts that are received by EFTPOS and click reconcile. The system will group them together.

When you bank your cash and cheques you can also group them up in the same way.


Option 3:

If you really want to have an undeposited funds account then you can try this method.

Free Accounting Software has just one "cash" account per organisation. You can choose what this represents. So you could choose for it to represent cash on hand or cash at bank or even "Undeposited funds".

If you choose for it to represent undeposited funds, you then set up a new account called "Cash at Bank". When you process Cash Received and Cash Payments they are paid or received from undeposited funds.

So you would process Cash Received as normal.

You then process a Cash Payment which will reduce undeposited funds and transfer the money to Cash at Bank. To do that simply process a cash payment and select the account Cash at Bank.

This is probably the closest match to the way you are doing it now. It may be the best option when you do not want to enter the payments because you want to leave this for the bookkeeper. Although as I mentioned before I recommend you just forget about undeposited funds and do a proper bank reconciliation.
 

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