Do you have questions about using the Undeposited Funds Account in QuickBooks?
Brittini Sharp
Brittini Sharp

BY BRITTINI SHARP — STAFF ACCOUNTANT

The Undeposited Funds Account is used to hold payments from customers that haven’t been deposited into the bank yet. The Undeposited Funds Account acknowledges that payments have been received from customers, but does not change your cash balance until you make your deposit at the bank. This account is used as a part of the Accounts Receivable Workflow.

Here are the steps in processing an Accounts Receivable transaction:

  • Create an invoice
  • Receive customer payments
  • Place payments into the Undeposited Funds Account (updating your preferences in settings will have QuickBooks do this automatically)
  • Complete the Make Deposits form
    • Group multiple customer payments together to match the amount that you wish to deposit to the bank.
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Did you know…

  • If you ever have an amount outstanding in the Undeposited Funds Account from prior months, it is likely that a sale was double recorded – you recorded the account receivable and again when you made the deposit.
  • The preference to use Undeposited Funds can be edited if you currently do invoicing in QuickBooks.

For more information on using the Undeposited Funds Account in QuickBooks or for other QuickBooks help, contact us.