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Undeposited Funds and Bank Accounts refer to different concepts. I'm here to provide the distinction between the two to guide you through the process, LCUUF.
The Undeposited Funds is a temporary account used to hold payments you receive but have not yet deposited into your bank account. This serves as a holding area for cash or checks that you plan to deposit.
While bank accounts like checking, savings, and petty cash accounts represent actual bank accounts that your business owns and the real money available to the business.
When you receive a payment in QuickBooks, it is automatically recorded in your Undeposited Funds account. When you're ready, you can consolidate all payments into a single deposit transaction to your bank account.
You'll also have the option to select the Cash Box account. under the Deposit To field at the time of receiving the payment. This allows you to allocate the amount directly to the Cash Box account instead of placing it in Undeposited Funds. I've added a screenshot for your visual guide:
Next, move the amount from the Cash Box account to your actual bank account.
To give you an overview of how Undeposited Funds works, check this article for more details: Deposit Payments into the Undeposited Funds in QuickBooks Online.
Additionally, learn how to categorize downloaded transactions once you connect your bank. Go through this article for reference: Categorize Online Bank Transactions in QuickBooks Online.
Post your reply below if you have any other follow-up questions about Undeposited Funds and bank deposits. I'll be one post away if you need further assistance.
Yes, creating a separate account for Cash on Hand in QuickBooks Online (QBO) is a practical solution for your scenario, LCUUF. This is the closest option we have because the Undeposited Funds (UF) account is one of the default accounts in QBO and has a specific function. I'd be glad to detail this to you.
I appreciate your efforts in managing your organization's finances. I'm interested in understanding how the opening balance entry in the UF account was initially recorded. This information will help us provide more accurate guidance on reallocating the funds to the appropriate accounts.
If the entry only shows the actual cash amount in the Cash Box when you started using QuickBooks Online (QBO), consider deleting this incorrect entry. After that, you can accurately re-enter the amount while setting up a Cash on Hand account, which will help you effectively monitor the cash in your Cash Box.
Here’s how to up a petty cash account:
- Go to the Gear icon, and then select Chart of accounts.
- Select New.
- Choose Bank from the Account type dropdown.
- In the Detail type dropdown, select Cash on hand.
- Enter Petty Cash (or Cash Box) in the Account name field.
- Since you already have money in your cash box, enter the amount in the Starting date and opening balance field and choose the correct as-of date.
- Select Save.
To move contributions into your bank account, you'll first need to record a bank deposit and post it to your cash box account in QuickBooks Online (QBO). After that, you can transfer the funds from your cash box to your bank account. Since you mentioned that you will be depositing 20 contributions into your bank account, we can edit the deposit suggested to ensure that it's correctly posted to the designated cash box account.
Follow these steps:
- Find the bank deposit entry for the 20 contributions.
- From the Account dropdown menu at the top left corner, select the cash on hand account you created.
- Review the other details, then Save and close.
Next, create a transfer entry from your cash box account to your bank account to indicate that the contributions have been transferred: Transfer funds between accounts.
For managing the cash inflow and outflow of your cash box account in QBO, refer to this article as a guide.: Set up and use petty cash in QuickBooks Online.
Before we wrap up, I suggest you explore QuickBooks Live Bookkeeping to streamline your accounting, maintain precise financial records, and access professional support. This could free up valuable time, allowing you to concentrate on expanding your business.
By following these steps, you should have a clearer structure for managing cash transactions and bank deposits in QuickBooks Online. If you have more questions, feel free to return for assistance. Have a nice day ahead.
We are glad to hear that our colleague's advice helped you resolve your concerns, LCUUF. Regarding your follow-up question, you can set up and use the multi-currency feature to record the pledge using other currencies. Let me provide the steps on this below.
Here's how to enable it:
- Go to Settings and select Account and settings.
- Click Advanced.
- In the Currency section, select Edit ✎.
- From the Home Currency ▼ drop-down list, choose your currency.
- Check the Multicurrency box and confirm that you understand that you can't undo this option.
- Click Save.
Once done, follow step five in the Learn about section of this resource to record transactions in Mexican currency: How to use Multicurrency in QBO.
In addition, I will attach these helpful articles for you to reference in future tasks:
- Learn about exchange rates in QuickBooks Online
- Frequently asked questions about home currency adjustments
As always, you can freely visit our Community Forum for additional questions or concerns about setting up and adding multiple currencies. Kindly save this thread or click the Reply button below, and I will quickly respond and offer further assistance. Take care!
Disclaimer: I've updated my response to offer more clarity regarding the follow-up question.
Undeposited Funds and Bank Accounts refer to different concepts. I'm here to provide the distinction between the two to guide you through the process, LCUUF.
The Undeposited Funds is a temporary account used to hold payments you receive but have not yet deposited into your bank account. This serves as a holding area for cash or checks that you plan to deposit.
While bank accounts like checking, savings, and petty cash accounts represent actual bank accounts that your business owns and the real money available to the business.
When you receive a payment in QuickBooks, it is automatically recorded in your Undeposited Funds account. When you're ready, you can consolidate all payments into a single deposit transaction to your bank account.
You'll also have the option to select the Cash Box account. under the Deposit To field at the time of receiving the payment. This allows you to allocate the amount directly to the Cash Box account instead of placing it in Undeposited Funds. I've added a screenshot for your visual guide:
Next, move the amount from the Cash Box account to your actual bank account.
To give you an overview of how Undeposited Funds works, check this article for more details: Deposit Payments into the Undeposited Funds in QuickBooks Online.
Additionally, learn how to categorize downloaded transactions once you connect your bank. Go through this article for reference: Categorize Online Bank Transactions in QuickBooks Online.
Post your reply below if you have any other follow-up questions about Undeposited Funds and bank deposits. I'll be one post away if you need further assistance.
