Undeposited Funds basically refers to an internal other asset account created by QuickBooks Desktop for the purpose to maintain the funds till the time you are ready to deposit them. It works as the Deposit To account while receiving payments, using a payment item on an invoice or entering a sales receipt.
This article will provide you a complete guide on how the undeposited funds account works. You need to read this article carefully as it can be helpful for you for maintaining your records. If you have some queries about the undeposited funds account then you can also contact us at QuickBooks Customer Service Phone Number +1800-567-0425 as well.
How The Undeposited Funds Account Works?
If You Use Undeposited Funds:
- You have the option to deposit payments in the group to equalize the deposit to your financial institution. Doing this will help you to reconcile your statement with the bank account added in QuickBooks Desktop.
- The Deposit To option will not be available in the Receive Payments or Enter Sales Receipts window. All the payments you get from your customers automatically go to the Undeposited Funds account.
- You will have to deposit payments that are visible in the Undeposited Account to your bank account through the Make/Record Deposit window.
- You won’t be able to use the default Undeposited Funds account for the Deposit To or the From Account drop-down in case if you are in the Make Deposit window. You will see that Only QuickBooks can make deposits from Undeposited Funds. If you want to use transactions from Undeposited Funds then you will have to choose Payments from the menu.
- Because a deposit can include any number of payments, QuickBooks doesn’t connect a customer name. As such, depositing payments from Undeposited Funds to a bank account, you won’t see the payee name in the bank account register.
|Note: If some of the Accounts Receivable functions are not used by you such as invoices and payments or if you take individual payments to your financial institution then you have the option to bypass the Undeposited Funds account by going directly to the Make/Record Deposit window.|
If You Don’t Use Undeposited Funds
- You have to choose a Deposit To account while receiving payments or Enter Sales Receipts.
- Every payment you deposit directly into an account shows up on a different line in the account register and it will be mentioned as a payment but not as a deposit.
- All your payments will directly deposited to the selected bank.
Change The Default Account For Depositing Payments
- From the main menu of QuickBooks, go to Edit > Preferences.
- Click on Payments and then navigate to the Company Preferences
- Mark or unmark the Use Undeposited Funds as a default deposit to account checkbox as appropriate.
- Click on OK.
Remove Already Deposited Items From Undeposited Funds
An invoice and a Deposit is used to record the income. The Income will be overstated in case if a Payment for an Invoice is in Undeposited Funds but a Deposit is recorded separately. This can be corrected by removing the separate Deposit and moving the Payment from the Undeposited Funds. However, if you couldn’t be modified then you have to remove the Payment from the Payments to Deposit window. For this, you have to create a zero deposit through an overstated income account.
Important: Before you remove the payments from the undeposited funds account, you have to first create a backup of your QuickBooks company files.
- Go to the Banking menu and then choose to Make Deposits.
- Choose the Payment/s from the Payments to Deposits and then click on
- From the Make Deposit window, select the overstated income account from the From Account drop-down.
- Provide a negative amount under the Account column and make sure that the Deposit Subtotal is zero.
- Click on Save & Close.
Show Undeposited Payments In Undeposited Funds
If you want to see the payments that are not cleared or deposited yet then you can customize the Undeposited Funds QuickReport.
- Go to the List menu and then select Chart of Accounts.
- Right-click on the Undeposited Funds account and then click on QuickReport: Undeposited Funds.
- Select All from the Dates drop-down.
- Click on Customize Report and then navigate to the Filters
- Go to the Filter list and then select Cleared.
- Under Cleared, select No, then OK.
Reach Us For Support
Hopefully, you find this article helpful and you are able to understand the concept of undeposited funds accounts. In case you have any kind of doubts or you are having some issues while using the undeposited funds accounts then you can get in touch with us at our toll-free QuickBooks Support Phone Number +1800-567-0425 to get an instant resolution for your issues.