Basic Banking Concepts And Common Terminologies In QuickBooks Desktop

Basic banking concepts means recording the bank transaction manually in QuickBooks Desktop. We will mention here some of the basic banking concepts and common terminologies in Quickbooks Desktop.

ACH (Automated Clearing House) is an exchange that happens between participating financial institutions in the United States. A large volume of credit and debit transaction runs in lots by ACH.  Keep reading to know more about basic banking concepts and common terminologies in QuickBooks Desktop.

Bank Account

You need to use a bank account in QuickBooks to keep tracking of your checking, saving, and money market accounts. You can add one bank account for every account that you have at the bank or any other financial institution. 

Set up a bank account

QuickBooks for Windows

  1. First, you need to go to the menu and select Lists and then go to the Charts of Accounts.
  2. Then you need to go to the Account dropdown and then select New.
  3. Now you need to select the Account Type window and then select Bank and continue.
  4.  Then got to the Add New Account window:

Here you need to type the Bank name first when you need to select the Enter Opening Balance button and according to your bank statement, you need to type here your Statment Ending balance and statement ending date. You will get more information about the opening balance that is available finally, you need to select OK and then Save & Close it.

QuickBooks for Mac

  1. First, you need to go to the Lists and then choose Charts of Accounts.
  2. Then you need to select the + Plus icon to open a new account.
  3. Then you need to select Bank from the Type dropdown.
  4. Here you need to enter the bank’s name.
  5. Then fill out the Opening balance and as of date option.
  6. Then finally select OK.

Enter a transaction in the bank account register

A bank account registration will represent a checking, saving, money market, or petty cash account in the QuickBooks Desktop.

Remember that you can enter the checks and deposit directly in a bank account that registered instead of you can write the check window and you can make the deposits window to make the transactions. Working directly in a Bank account register will help you to work in very little time and allow you to see the entire record of the account.

  1. First, you need to go to the Chart of Accounts.
  2. Then you need to Double-click on the account to open the register.
  3. Now select the black entry at the end of the register.
  4. Here you need to fill in the Date, payee, and check or deposit Number options.
  5. Then Enter the amount in the Payment option for checks or Deposit for deposits.
  6. Here you need to select the account that you want to use for this transaction.
  • For checks- You need to use the account that you need to track.
  • For deposits- You need to use the account where you will take the funds.
  1. Here you can enter the note in the memo section to adding more details to the transactions.
  2. Then finally you need to select Record to save the transaction.

Bank Credit versus Bank Debit

Using the business owner’s perspective, Bank credit is the transaction that will increase the bank balance. As Example, You will say that your bank was credited if money is deposited in it.

Using the business owner’s perspective, bank debit is a transaction that will decrease the bank balance. As Example If money will be deducted from your bank account then you will say that your bank was debited. 


It is a written order to a bank to pay a particular amount from the drawer’s account. All checks have a unique number. You can consider that checks are as good as cash.

Credit card

A credit card will provide you an option to borrow funds for purchases or paying bills. If you have a credit card that you are using for your business then you should set up, use, and pay a credit card account.


You can Deposit customer payments into your bank account. An entire list of deposit can help you reconcile the account correctly.

EFT (Electronic Funds Transfer)

You can send money by Electronic fund transfer from one bank to another, either it can be a single financial institution or across financial institutions by a computer-based system and there is no need for the direct intervention of bank staff.

Petty Cash (Cash Drawer)

Petty cash is a small amount of cash in our hand that is used for paying small amounts owed instead of giving a check. Petty cash also called as Petty Cash Fund. You have to put some money into petty cash or a cash drawer so you can start using it to record your expenses.


It is the process to match the transactions that you have entered in QuickBooks Desktop with your bank or credit card company’s online statement. 

Routing number

There is a nine-digit number that you can use to identify a financial institution in a transaction is called a bank routing number. It’s usually printed at the bottom left side of your checks.

Transfer Funds

You can transfer funds between checking, saving, and money market accounts in your chart of accounts.

  1. First, you need to go to the Banking menu, then choose the transfer funds option.
  2. Then you need to fill the required fields:
  • From account- you need to fill here the account number which you will use to transfer the fund.
  • To Account- You have to fill in the account number in which you need to transfer the fund.
  • Amount- you need to mention here the total amount you need to transfer.
  • Date- mention the current date here to make a record.
  1. Now you also make a note in the memo to add more information.
  2. Then finally you need to press Save then select OK.

Note: If you want to do more transfers then you need to select Next. This will save the current transfer and will clear the field to fill again with new detail.

Undeposited Funds

QuickBooks always use the undeposited funds to hold the payments that awaiting deposit. These can be in the type of cash, check, or charge and are often stored in a cash drawer, bank bag, or electronic batch. Then by default,  undeposited funds will turn on. And you can change it by going through the payment preferences.

Winding Up!!

At the end of this article, we are hoping that you have read it and understand all the Basic banking concepts and common terminologies that we have discussed here. Now you can take advantage of the knowledge provided about the basic banking concepts.

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