When is it necessary to record a deposit in QuickBooks?

Recording a deposit in QuickBooks is essential when payments have been received but are not yet deposited into the bank. This scenario typically occurs when a business receives cash, checks, or other forms of payment from customers that have not yet been physically taken to the bank for deposit. By recording these transactions as deposits in QuickBooks, the accounting records maintain accuracy, reflecting the proper cash flow and ensuring that the Business's financial statements are current. This practice helps keep track of all incoming funds and provides a clear overview of cash position, facilitating better financial management and reconciliation processes.

Creating new customers, issuing estimates, or canceling transactions do not necessitate the recording of deposits, as they involve activities that do not directly impact the cash account until actual funds are received and are in need of accounting.