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Intuit

Deposit payments into the Undeposited Funds account

Learn how to put payments into the Undeposited Funds account before you combine them into a deposit in QuickBooks Online.

The Undeposited Funds account holds customer payments until you deposit them at your real-life bank. Once you have your deposit slip, combine the payments in Undeposited Funds into a single record so QuickBooks matches your bank records.

Here’s how to deposit payments into your Undeposited Funds account before you combine them in QuickBooks.

Step 1: Put payments into the Undeposited Funds account

Payments you download from your banks and credit cards:

If you connect your bank and credit card accounts, QuickBooks downloads all your transactions. You don’t need to combine downloaded transactions or use Undeposited Funds because there’s already a complete record. You just need to categorize your downloaded transactions.

Payments processed with QuickBooks Payments:

QuickBooks takes care invoice payments processed using QuickBooks Payments. However, if you need to combine payments processed outside of QuickBooks Payments, follow the steps outlined in this article.

Invoice payments you process outside of QuickBooks:

  1. Select Create (+) from any page.
  2. Select Receive Payments.
  3. Select the customer from the drop-down menu.
  4. Select the checkbox for the invoice you’re receiving payments for.
  5. Select Undeposited Funds from the Deposit to drop-down menu.
    Tip: You only have one Undeposited Funds account. Use it to hold payments from all of your checking and savings accounts.
  6. Fill out the rest of the form.
  7. Select Save and New or Save and Close.
Tip: Always review the “Deposit to” field so you know where your payments are going.

If your bank records a single payment as its own deposit, you don’t need to combine it with others in QuickBooks. Instead, you can put the payment directly into your bank account in QuickBooks and skip Undeposited Funds.

Sales receipts for payments you process outside of QuickBooks:

  1. Select Create (+) from any page.
  2. Select Sales Receipt.
  3. Select the customer from the drop-down menu.
  4. Select Undeposited Funds from the Deposit to drop-down.
  5. Fill out the rest of the sales receipt.
  6. Select Save and New or Save and Close.

Step 2: Make a bank deposit

With your deposit slip in hand, you can record a bank deposit in QuickBooks and combine payments. All payments you put into Undeposited Funds account automatically appear in the Bank Deposit window.

This shows the bank deposit screen with the invoice payments and sales receipts in undeposited funds as selectable options.

Use your deposit slip to decide how to combine the payments. Learn more and get detailed steps for how to combine payments and make a bank deposit.

Next Steps: Review your Undeposited Funds account

It’s good to periodically check your Undeposited Funds account to clear out any payments waiting to be deposited.

  1. Go to the Accounting menu.
  2. Select Chart of accounts.
  3. Find Undeposited Funds on the list.
  4. Select View register.[conditional region=“US” show_hide=“hide” ] Account history.

To add these payments to a deposit, follow Step 2: Make a bank deposit.