Accounting
Financial Management
Deposits in Transit: What They Are and How to Handle Them in a Bank Reconciliation
Last updated: October 17, 2026 · Independent guide · We do not sell rankings or coverage.
Deposits in transit are receipts you have recorded in your cash account and taken to the bank, but that the bank has not yet posted by the statement date. In a bank reconciliation you add them to the balance per bank, not the balance per books, and you do not book a journal entry for them because your ledger is already correct. The item should clear on the next statement within a few business days, and one that takes longer deserves a closer look.
Definition of a deposit in transit
A deposit in transit is a timing difference between your records and the bank’s. You debit cash when you receive and deposit a payment, but the bank credits your account only when it processes the deposit. A deposit made after the bank’s cutoff on the last day of the month is the usual case.
Standard reconciliation guidance treats deposits in transit and outstanding checks as adjustments to the bank balance, while bank debit and credit memoranda you have not yet recorded adjust the book balance. Errors are corrected on whichever side they occurred, and only the items that adjust your books need journal entries (Tallahassee State College, no date shown). Sage, which sells accounting software, describes deposits in transit as a normal timing gap that usually clears within one to two business days (Sage, September 15, 2026).
Example: where a deposit in transit goes in the reconciliation
Illustration (constructed numbers). On September 30 your team deposits $3,250 of customer checks at 5:15 p.m., after the bank’s cutoff. The bank posts it on October 1. The September statement shows an ending balance of $48,600.00, and your general ledger shows $49,975.00. One check for $1,900.00 has not cleared, and the bank charged a $25.00 service fee you have not recorded.
| Bank side | Amount | Book side | Amount |
|---|---|---|---|
| Balance per bank statement | $48,600.00 | Balance per general ledger | $49,975.00 |
| Add deposit in transit (Sept. 30) | $3,250.00 | Less bank service fee | ($25.00) |
| Less outstanding check | ($1,900.00) | ||
| Adjusted bank balance | $49,950.00 | Adjusted book balance | $49,950.00 |
The $25 fee becomes a journal entry (debit bank fees, credit cash). The $3,250 deposit needs no entry because you already debited cash and credited accounts receivable when you recorded the receipt. In October you tick it off against the bank’s October 1 credit.
How deposits in transit are handled in practice and in software
Age every item. An exam-prep guide for the CPA audit section warns that a year-end deposit in transit that is slow to clear can point to a held check or a fabricated deposit (Open Exam Prep, September 2026).
Expect the auditor’s cutoff test. At year end, auditors obtain a cutoff bank statement covering a short period after the balance sheet date, sent directly by the bank, and use it to confirm that reconciling items cleared on time (Open Exam Prep, September 2026). A deposit in transit that has not cleared on the cutoff statement was most likely not received by year end, and the auditor will probably propose an adjusting entry (Dummies.com, Auditing For Dummies, March 26, 2016).
QuickBooks Online. Transactions you match while reviewing the bank feed already show as cleared when you open the reconcile screen, and Intuit tells you not to check items that are not on your statement (Intuit, August 5, 2026). A deposit in transit therefore stays unchecked, and the saved reconciliation report lists which transactions were cleared and which were left uncleared (Intuit, August 5, 2026).
Sage Intacct. Intacct gives unreconciled transactions a reconcile state of In Transit. You can list them from the Bank register report (Cash Management > All > Reports > Registers > Bank) by selecting Show reconciliation status and filtering on In Transit, and Sage lists uncleared deposits as one cause of a nonzero amount to reconcile (Sage Intacct Help, October 8, 2026).
NetSuite. You reconcile at Transactions > Bank > Reconcile Account Statement after matching bank data (Oracle NetSuite Help, no date shown). The Reconciliation Detail report (Reports > Banking/Budgeting > Reconciliation > Detail) has an Unreconciled section listing transactions in the system that are not reflected in your statement, which is where a deposit in transit appears (Oracle NetSuite Help, no date shown).
The documentation we reviewed does not show any of the three systems aging these items for you, so record the deposit date on your workpaper. For the wider close, see ERP for the financial close.
Related terms
- Outstanding check: a payment you recorded that the bank has not yet paid; it reduces the bank balance in the reconciliation.
- Undeposited funds: a holding account for receipts not yet grouped into a bank deposit, covered in our cash reconciliation guide.
- Account reconciliation: the wider practice of proving every balance sheet account; see general ledger reconciliation.
How we researched this
We read the top-ranking pages for “deposits in transit” from Sage, Fit Small Business and Accounting Simplified, then checked vendor help documentation from Intuit, Sage Intacct and Oracle NetSuite and audit study material on cutoff testing. We checked all sources on October 17, 2026. No vendor paid for inclusion.
Related guides
Frequently asked questions
Do you add or subtract deposits in transit in a bank reconciliation?
You add them to the balance per bank statement. Your books already include the deposit; the bank has not caught up.
Do deposits in transit need a journal entry?
No. You recorded the receipt when it came in, so the ledger is correct. Only book-side items such as bank fees, interest, returned checks and errors in your own records need entries.
How long should a deposit in transit take to clear?
Sage says they usually clear within one to two business days. If one is still uncleared after that, confirm with the bank that it was actually made, because auditors treat a year-end deposit that clears late as a sign of a cutoff error or a fabricated deposit.
Sources
- Tallahassee State College Learning Commons, Steps in Preparing a Bank Reconciliation, no date shown.
- Sage (sells accounting software), What are deposits in transit and why are they included in a bank reconciliation?, September 15, 2026.
- Open Exam Prep, Auditing Cash, Bank Reconciliations and Interbank Transfers (Kiting), September 2026.
- Dummies.com, How to Check Bank Reconciliations (Auditing For Dummies), March 26, 2016.
- Intuit, Reconcile an account in QuickBooks Online, August 5, 2026.
- Intuit, View, print, or export a reconciliation report, August 5, 2026.
- Sage Intacct Help, Troubleshoot reconciliation, October 8, 2026.
- Oracle NetSuite Help, Reconciling Transactions, no date shown.
- Oracle NetSuite Help, Reconciliation Detail Report, no date shown.
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
