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Deposit payments into the Undeposited Funds account in QuickBooks Online

by Intuit Updated a day ago

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

The Undeposited Funds account keeps a record of payments in QuickBooks until you physically deposit the same payments at your real-life bank. Banks often combine all the payments you deposit into a single transaction. Once you have your deposit slip and know which payments your bank combined, you can do the same in QuickBooks.

Put payments into the Undeposited Funds account until you're ready to combine them. When you have your deposit slip, you can combine payments from Undeposited Funds into a single record. This way, QuickBooks always matches your bank records.

Here’s how to put payments into your Undeposited Funds account.

Step 1: Put payments into the Undeposited Funds account

You only have one Undeposited Funds account. Use it to hold all payments you need to combine and group together. You'll decide which account in QuickBooks to put the deposit into when you combine.

Follow the guidelines below based on how you processed the payment and entered the transaction into QuickBooks.

Transactions you download from your banks and credit cards

If you connect your bank and credit card accounts, QuickBooks automatically downloads all your transactions. You don’t need to combine downloaded transactions or use Undeposited Funds since QuickBooks already has the info from your bank. All you need to do is categorise your downloaded transactions.

  1. Select + New.
  2. Select Receive payment.
  3. Select the customer from the Customer drop-down.
  4. Select the checkbox for the invoice you’re receiving payments for.
  5. From the Deposit to dropdown, select Undeposited Funds.
  6. Fill out the rest of the form.
  7. Select Save and sendSave and new, or Save and close.

Sales receipts for payments you process outside of QuickBooks

  1. Select + New.
  2. Select Sales receipt.
  3. Select the customer from the Customer drop-down.
  4. From the Deposit to drop-down, select Undeposited Funds.
  5. Fill out the rest of the sales receipt.
  6. Select Save and sendSave 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. Instead, you can put the payment directly into an account in QuickBooks and skip Undeposited Funds.

Step 2: Make a bank deposit

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

Next Steps: Review your Undeposited Funds account

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

  1. Go to Transactions and select Chart of accounts (Take me there).
  2. Find the Undeposited Funds account on the list.
  3. Select Account history.

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