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Frequent Explorer *

Undeposited funds

Hi team

 

I've recently started using quickbooks. All I'm really looking for it to do is track my income verses my expenses (for assisting my tax return ) and my VAT Returns. I've already linked it for MTD. 

 

So I only really need to put in all my invoices and all my expenses. I do not want to link it to my actually business bank account. 

 

I notice when I mark an invoice as 'paid' it goes into the 'undeposited funds' 

 

Is there any reason I cant just leave all my income in there? Or should I still move it to default bank account even though I don't want to link it to my actual bank account?

 

Also - when I record expenses (say I buy materials for a job) - it asks for the payment account I bought the materials from - should this be undeposited funds? (if that is where i leave all my income?) or should it be bank account? 

 

Does any of that matter for tracking my VAT returns and income verses expenditure? 

 

Thanks

 

Matt

 

 

4 REPLIES 4
Frequent Explorer *

Re: Undeposited funds

Anyone???

 

Help!!

QuickBooks Team

Re: Undeposited funds

Hello Matt

 

You do not have to link the bank account in real life through the QuickBooks to record the income and expenses through the banking connection option.

However if in real life you have put the money into the bank then the best thing to do is to set up a chart of account to represent the bank account and then when you mark an invoice as paid in the drop down which shows as undeposited funds change that to the bank account chart of account you set up(steps included below)

 

Where it is an expense you can then select the same bank account chart of account. Unless the situation is you are not banking the money and using petty cash money in which case you can set up a separate chart of account called petty cash in the same way as below except in detail type select cash in hand and name it petty cash.The undposited funds is intended for use when it is something you will be banking at a later date.If it is something you will not be banking as income and will use to pay for expenses you can record income to petty cash and expense out from it.

 

To set up the chart of account go to accounting on the left>chart of accounts>new>in account type select cash at bank and in hand>in detail type select current(if it is a saving account select savings) >in name select the name of the bank>you can enter in an opening balance at the time you want to start recording banking transactions>save and close.

 

Any income you have already recorded to undeposited funds you can bank by going to the +symbol>bank deposit>just select the bank account in the account section in the top left>select the date>tick the payments in the payments included in this deposit section>save

 

 

Any questions at all on this feel free to reply back to this post

 

Emma

 

 

Frequent Explorer *

Re: Undeposited funds

Hi Emma

 

Thank you!!! You’re an absolute star that’s exactly what I needed. I never use cash I always use the card (bank account) to buy all my expenses and all my invoices get paid into that account too. So I think I will set up a ‘business bank account’ as you describe in QuickBooks. 

 

Can you help will expenses categories? I’m confused with what they mean. 99% of all my expenses are stock or materials for a job - what category should this come under? Some people say its ‘purchases’ whereas some tell me it should be ‘cost of good sold’ 

 

I can work out the insurance and things like office supplies :)

 

Really appreciate your help :)

 

Matt

 

QuickBooks Team

Re: Undeposited funds

Hi Matt,

 

 

The categories (chart of accounts) in QuickBooks Online are customisable to your business and you can create your own by going to Accounting > Chart of accounts > New, if you wish to setup accounts under specific names rather than use the default accounts. 

 

The account name given when creating the account will appear on the category drop-drown and on the reporting, so allows you to create a detailed break-down of your expenses if you have multiple expense types.

 

Please let us know if you would like further explanation :)