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Level 1

How can I clear Undeposited Funds balance?

Hello

I own a drink business and use Square as my POS. Square (SQ) sends daily sales transactions to QB and deposits sales amount less QB fees to my bank for credit card sales and I deposit all cash sales on a regular basis. I have matched all cash sales deposited to the daily sales transactions for 2019. I'm preparing the book for 2019 and I still have a balance in my Undeposited Funds. I already subtract out the 2020 credit card deposits for 2019 sales transactions and 2019 cash sales that were deposited in 2020 by myself. Yet, I still have a $2K balance in my Undeposited Funds. It looks to me that the issue might be with the SQ fees. From my understanding:

- SQ sends daily sales transactions to QB. QB records them in Revenue and Undeposited Funds for full amount of sales. Does QB also record SQ fees at this step? If not, does QB record SQ fees at all or I have to manually do it?

- SQ sends credit card sales, less SQ fees to my bank. Does SQ also send this info to QB?

- Bank sends deposit transactions to QB and they get automatched to my credit card sales transactions (I only need to hit "match"). It looks to me that my issue might be because the bank's deposit transactions get matched to the credit card sales but not excluding the SQ fees, so QB shows that I still have Undeposited amount although this amount is reduced by the SQ fees that SQ kept

For example: I have credit card sales transaction of $10. QB records $10 in revenue and $10 in Undeposited Funds. SQ sends my bank $8 and keeps $2 for SQ fees. My bank sends $8 deposit info to QB and QB applies $8 deposit against $8 sales and still shows that $2 still undeposited. Does that mean I have to manually create a journal entry for SQ fees of $2?

Thanks for your help

4 Comments
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Level 15

How can I clear Undeposited Funds balance?


@anhmle87 wrote:

 

For example: I have credit card sales transaction of $10. QB records $10 in revenue and $10 in Undeposited Funds. SQ sends my bank $8 and keeps $2 for SQ fees. My bank sends $8 deposit info to QB and QB applies $8 deposit against $8 sales and still shows that $2 still undeposited. Does that mean I have to manually create a journal entry for SQ fees of $2?

Thanks for your help


Don't use a journal entry.

 

use make deposits and select all the $2 open invoices, note the total

at the bottom of make deposits is a place for additional deposits, select the merchant fee expense account and enter the total amount as a negative number.

save the zero dollar deposit

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Level 11

How can I clear Undeposited Funds balance?

@anhmle87

 

If you're using Square, you may want to read this article for the correct setup.

 

Learn how to import your Square sales data into QuickBooks Online.

https://quickbooks.intuit.com/learn-support/en-us/sync-applications/sync-square-with-quickbooks-onli...

Highlighted
Level 1

How can I clear Undeposited Funds balance?

Thanks for the quick reply. So QB does not automatically create the SQ fees expense entry for me?

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QuickBooks Team

How can I clear Undeposited Funds balance?

Hi there, anhmle87.

 

You'll want to manually enter them. Let me show you how to do the process.

 

First, we have to set up an Expense account. Here's how:

 

  1. Go to the Hamburger icon and select the Accounting menu. 
  2. Click the New button on the top-right corner.
  3. In the Account dialog, create an Expense account for Bank Charges, and add the name.
  4. Click Save.

When you create a Deposit transaction, you can add a line item for the Bank fee. Here's how:

 

  1. Go to the Hamburger icon and select Bank deposit.
  2. Enter the details, then add a line item for the Bank fees, make sure that it is an Expense account.
  3. Enter a negative amount for the Bank fee.
  4. Hit Save and close.

 

I also added a screenshot for your reference.

 

 

NOTE: You have to add a line item for the fees so that you can match the transaction with your bank right away during reconciliation.

 

For more information, check out this article: Match and categorize bank transactions in QuickBooks Online.

 

For future reference, I can see that this article can be handy: Learn the reconcile workflow in QuickBooks.

 

Let me know if need further assistance. I'd be glad to back you up. Have a good one.

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