Basic Banking means recording bank transaction in QuickBooks Desktop manually. This article will provide you some of the most common terminology associated with QuickBooks.

ACH (Automated Clearing House) is an exchange of electronic transactions between the bank in the United States. ACH runs a large number of credit and debit transactions in batches.

Bank Account

Using Bank Accounts in QuickBooks keeps a track of your checking, savings, and money market accounts. Add a bank account for each account your company contains at a bank or any financial institution.

Set Up A Bank Account

Follow these steps to setup a bank account:

  • Open QuickBooks and from the main menu, go to List > Chart of Accounts.
  • Click on New from the Account drop-down.
  • From the Choose Account Type screen, click on Bank and then Continue.
  • From the Add New Account window:
    • Enter the Bank Name.
    • Click on the Enter Opening Balance option and then enter your Statement Ending Balance and Statement Ending Date depending upon your bank statement. More information about opening balance is available here.
    • Click on OK and then Save & Close.

Enter A Transaction In The Bank Account Register

A bank account registered in QuickBooks Desktop can represent a checking, savings, money market, or petty cash account.

Instead of using the Write Check window and the Make Deposits window, you can store checks and deposits directly in a bank account register to create transactions. When you directly work in an account register, you are able to work with more speed and it will also help you to check all the records of your account.

You need to follow the below steps to do this task:

  • Open the Chart of Accounts from the List menu and then double-click on the bank account that you want to use.
  • Provide the date, check or deposit number and payee on the blank entry at the end of the register.
  • Enter the amount.
    • For checks and fees: Enter the amount in the Payment
    • For deposits and interest earned: Enter the amount in the Deposit
  • Select the account.
    • For checks: Provide the name of the account you are using to track this type expense.
    • For deposits: Provide the name of the account which is the source of the funds you are depositing.
  • (Optional) In the Memo section, enter a note about the transaction.
  • Click on Record.

Bank Credit Versus Bank Debit

Using the business owner perspective, Bank Credit is the transaction that increases the bank balance.

When you use it as a business owner, Bank Debit is the transaction that decreases the bank balance.


A check is the written order to a bank to pay the amount from the drawer’s account. All the check numbers are unique per bank. Checks are considered as effective as cash. For more information, you can visit: Create, Modify, And Print Checks In QuickBooks Desktop.

Credit Card

Credit Card allows you to get funds for purchases or to pay bills and you can pay them later. If you are using a credit card for your business then you can visit: How To Pay Credit Card Bill In QuickBooks.


You have to Deposit Customer Payments into your bank account. The complete deposits lists allow you to reconcile your bank account accurately.

EFT (Electronic Funds Transfer)

Transferring money from one account to another through Electronic means is known as Electronic Fund Transfer. It can be either within a single financial institution or different financial institutions using the computer-based systems and without any direct intervention of bank staff.

Petty Cash (Cash Drawer)

A small number of cash that is used to pay small amounts owed without using a check. Petty cash is also known as Petty Cash Fund. You have to keep money into petty cash or a cash drawer to use it to record your expenses.


Reconciliation basically is a process to match transactions entered in QuickBooks Desktop and bank or credit card account statement.

Routing number

Bank routing number or routing transit number (RTN) is a nine-digit number that helps you to identify a financial institution in a transaction. It can be found at the bottom left side of your checks.

Transfer Funds

QuickBooks provides you the option to transfer your funds between checking, savings, and money market accounts in the Chart of Accounts window.

  • Go to the Banking menu and select Transfer Funds.
  • Select the account from which you want to transfer the funds from the Transfer Funds window.
  • Choose the account to which you will be transferring the funds.
  • Provide the amount that you wish to transfer.
  • Click on Save & Close.

Undeposited Funds

QuickBooks uses Undeposited Funds to keep payments awaiting deposit. These payments can be in form of cash, check or charge and are usually kept in a cash drawer, bank bag or electronic batch. The Updeposited Funds are turned on in QuickBooks by default. You can make changes in it by going into Edit > Preferences > Payments. To know more about Upndeposited Funds, you can visit: Understand How The Undeposited Funds Account Works.

Reach Us For Support

Hopefully, you find this article was helpful for you and you now have a clear idea about the Basic Banking Concepts And Common Terminologies. In case if you are having any kind of confusion about it or you are having some issues while using the QuickBooks Desktop then you can contact us at our toll-free QuickBooks Support Phone Number +1-866-701-7446 to get an instant solution for your issues.


Basic Banking Concepts And Common Terminologies In QuickBooks

Leave a Reply

Your email address will not be published. Required fields are marked *

Call Now ButtonCall Us: +1-866-701-7446