Tips for taking on a massive Undeposited Funds cleanup in QBO


Those transactions could result in your sanity going right out the window—along with your ability to file an accurate tax return. Continue entering payments received from your customers until all payments have been entered. Now, select the invoice or invoices the customer paid.

  • Also, be sure you are posting the deposit to the correct account — in this case, checking — and that the date on the transaction is the date you will take the deposit to the bank.
  • Thank you for sharing with us an update about your workaround, @jwrt19.
  • They enter customer payments into undeposited funds, as they normally should, but we see a problem.
  • I have an undeposited fund listed in QB which came from the POS.

I’m more than happy to help you out again if you have more questions about managing your Undeposited Funds account. Would you like to learn more about other processes in QuickBooks? Let me know if you have any questions about undeposited funds. I’ll be one post away if you need further assistance. If you want to avoid seeing the JE from appearing when making a deposit, you can transfer the amount in the Undeposited Funds account to a designated account.

Using Undeposited Funds in QuickBooks Online

We make it a point to reconcile the balance sheet accounts every month when we are doing month-end closings. This is important—not only to make sure no income is missing and everything is reported only once. It also matters because it helps you ensure that your receivables and payables accurately match what has occurred in the business.


You can create a Journal Entry, debit the Undeposited Funds account, and credit the designated account. You should seek guidance from your accountant to determine which account to create or use. Why not set up QBO to make deposits directly into the bank account as a default?

What are undeposited funds?

To write off bad debt, you’ll initially need to check your aging accounts receivable. I hope all of these details help you properly record your transactions. To clarify, the report shared by my colleague above is to help you trace the deposit.


Let’s sort this out so we can find a solution to the reconciled deposits showing on your Undeposited Funds (UF). When business is thriving, bookkeeping has a way of sneaking up on you. It’s often the least desirable task on your to-do list. The following applies to those of you who are using the Group with Other Undeposited Funds feature.

pricing, and service options subject to change without notice.

This is a “safety” feature in accounting, used to track the process of making a physical deposit. When you use the Group With Other Undeposited Funds option, you are using this feature. The Group With Other Undeposited Funds option is found in the Deposit To selection list. This image shows how Undeposited Funds will look on your balance sheet. The “normal” balance for the Undeposited Funds account is $0.

Once done, make sure to reconcile your accounts regularly. This ensures the transactions agree with your real-life bank and credit card statements. The cash sales can be tracked and deposited in the Undeposited Funds. This is an account which holds your funds until you’re ready to deposit them at your real-life bank.

  • QB wouldn’t allow me to deposit to a current asset.
  • However, I would still recommend consulting an accountant.
  • FreshBooks is made with small business owners and freelancers in mind.
  • The dummy bank account method, on the other hand, is potentially less accurate but it is a faster method of cleaning up undeposited funds.

He is the sole author of all the materials on QuickBooks only shows me “Bank” accounts and no “Other Current Assets” which is what I’m trying to deposit into. People’s accounts are set up in a certain way that not all receipts may be directly converted into cash straight away. Let me know if there’s anything else I can help about setting up your chart of accounts. Once done, let’s change back the cleared status in the bank register to R. You have clicked a link to a site outside of the QuickBooks or ProFile Communities.

Step 3: Locate the Deposit You Want to Delete

The Cash at bank and in hand is for the QBO UK version, and the other QBO rest of the world version can use the Cash and cash equivalent to select a Cash on hand detailed type account. I’d recommend following the suggestion that Rustler mentioned above. Simply create a cash account and deposit the funds in it. That way, your sales, and income will reflect in the Profit and loss report. I appreciate your effort in matching all your transactions just to fix your issue about your undeposited bank.

Want More Helpful Articles About Running a Business?

If you see a balance in Undeposited Funds on your balance sheet, you need to investigate. Again, make sure you are selecting Undeposited Funds from the “Deposit To” drop-down menu, and save the transaction. Click on the Banking menu on top of the screen, and then click Use Register from the drop-down list. Another option is to click Check Register under the Banking menu on your QuickBooks Desktop homepage. Let me know if you have any other concerns besides cleaning up an undeposited fund. The actual payment was never received and most likely will never be so there will not be anything to match it to.

How to use QuickBooks Online’s Undeposited Funds account

To make a simple payment against an invoice, provide the invoice RECORDNO as the RECORDKEY and specify a payment amount. To make a payment against a debit memo, use the RECORDNO from an ARADJUSTMENT as the POSADJKEY. You can only pay one or the how to set up quickbooks for a daycare chron com other in a single payment detail. When a payment does not cover the total balance, lines are paid using the waterfall method. Next, choose the bank account where the incorrect deposit was recorded from the Select Account drop-down menu.

Many companies have a credit card processor that dumps all the day’s deposits, less processing fees, into your bank account as one lump sum. If your business falls into that category, you’ll need to use the undeposited funds asset account to unravel it all. While we recommend always running your deposits through undeposited funds, the alternative is to record a check being immediately deposited in your bank account when received. For instance, when receiving a check against a customer invoice, you can choose to deposit the check immediately. The process for deleting this deposit is the same as the above steps. The difference is, rather than appearing in the undeposited funds account after deletion, the customer’s check will be deleted and any invoice it offset will now have an open balance.

Leave a Comment

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

Scroll to Top