How to clear out or deposit undeposited funds

I can help you enter undeposited funds in QuickBooks Online (QBO), Dennis35.

All payments in the Undeposited Funds account automatically appear in the Bank Deposit window. Let's put them into your specific account to clear them. Here's how:

1. Go to the +New button.
2. Under Other, select Bank deposit.
3. From the Account drop-down arrow, choose the account you want to put the money into.
4. Select the checkbox for each transaction you want to combine.
5. Make sure the total of the selected transactions matches your deposit slip. Use your deposit slip as a reference.
6. Hit Save and close.
   

The funds have now been moved from the Undeposited Funds account to your selected bank account, and the deposit is recorded in QuickBooks. Make sure to reconcile your bank account in QuickBooks to ensure that it matches your actual bank statement.

Please let me know if you have other questions about managing your customer payments. I'm always here to lend a hand. Take care!

I am trying to clear up some items listed on my balance sheet has "undeposited funds". But when I look they have been deposited and cleared on previous bank statements. So my question is, how do I go  in there and and clear this up?  I don't want to re-deposit and have duplicate deposits in there. I hoping someone can walk me through this. Thanks for any help I can get.

Hello there, 

I understand that you're looking to clear out or deposit undeposited funds. Let me share some insights on how to clear it out and how undeposited funds work in QuickBooks Online.

The Undeposited Funds account is used in QuickBooks to record and hold all payments until they are physically deposited at your real-life bank. However, if you connect your bank and credit card accounts to QuickBooks, it automatically downloads all your transactions. 

That's why you don't need to combine transactions or use Undeposited Funds because QuickBooks already has the information from your bank. All you have to do is categorize your downloaded transactions.

In your case, it appears that you matched the payments with the bank deposit downloaded via Banking Feeds, which explains why the deposits on your bank statement were cleared. Now, to clear the balance in your Undeposited Funds account, we have two options to avoid duplicate deposits.

The first is to undo the bank deposits that were matched to your customer transactions, Like this:

1. Log in to QuickBooks Online.
2. Go to the Banking or Transactions tab.
3. Choose the Categorized tab.
4. Look for the bank deposit you matched and hit Undo in the Action Column.

After that, record a bank deposit so that you can combine the transactions from your Undeposited funds account and match them to your deposit in bank feeds. Once completed, the undeposited funds account balance should be zero.

The second option is to undo the bank deposit, and then exclude it in your For Review window. Once done, simply combine transactions in QuickBooks with a bank deposit. Here's an article for a more detailed guide: Record and make bank deposits in QuickBooks Online.

I've also included this link for the complete guide to reconciling an account: Learn the reconcile workflow in QuickBooks.

Feel free to leave a comment in this thread for other banking concerns. I'll be glad to help. Have a great day!

Doesn't option 1 then leave all of these deposits in the bank feed area? What if we are trying to keep that clear as well?

I don't understand why when it can match the deposit up (my system links to Clio, so it's matching the payment in Clio to Quickbooks) it doesn't just put it into the bank account?

I appreciate you joining the thread with your bank feed inquiry, Sarah.

I'd like to clarify how you connect your Clio account to QuickBooks Online. Did you connect your Clio account as a bank feds or through app integration on our QuickBooks Online App menu? That way, we'll be able to give ways to match your Clio payment to your QuickBooks Online records. Providing screenshots also helps us in resolving this topic.

I'll await your answer and any further information concerning this matter. Kindly add them to your reply. Have a great day! 

I connected via the app on both programs. I matched them via the bank feeds that pull in from the linked bank account, but they default into undeposited funds. I don't get why it would do that when it is matching a bank transaction directly to a posted payment in Clio

Let me share some information about the integration of your data from Clio into QuickBooks Online (QBO), SARAH CPA.

Clio are synced to accounts in QuickBooks Online such as retainers, prepayment top-ups, and bills. Where QBO is only dependent on what Clio shares with the program. You can check the mapping of the payments from the app so it will not posted to Undeposited Funds. You can also contact their technical support to guide you through the mapping process. Just go to this link to reach out to them: Connect Clio with QuickBooks Online.

On the other hand, we can clear the Undeposited Funds in QBO (if you already match them) by undoing them in the program. Here's how:

1. Go to Transactions, then select Bank transactions. 
2. Click the tile for the bank or credit card account you downloaded the transaction from.
3. Choose the Categorized tab.
4. Find the transaction you want to unmatch.
5. Select the blue transaction link in the Added or Matched column to see the matched transaction.
6. Press Undo from the Action column.

To learn more about undoing or unmatching transactions downloaded, refer to this article: Unmatch downloaded bank transactions or move them to another account. Once done, just deposit to move the Undeposited Funds account into your specific account to clear them. Here's how:

1. Click the +New button.
2. Select Bank deposit under Other.
3. From the Account drop-down arrow, choose the account you want to put the money into.
4. Choose the checkbox for each transaction you want to combine.
5. Make sure the total of the selected transactions matches your deposit slip. Use your deposit slip as a reference.
6. Press Save and close.

You can check out this article for a more detailed guide: Record and make bank deposits in QuickBooks Online. Once done, you can match the transactions again to avoid duplicates. Additionally, you can visit this link to learn more about reconciling accounts to make them balanced and accurate: Reconcile an account in QuickBooks Online. 

If there's anything else that I can help you with aside from managing your bank transactions or any banking-related, please let me know in the comments below. I'll be here ready to lend a helping hand. Have a good one.

This seems to be untrue.  My bank clears the deposits before I can even connect them to my quickbooks account.  QB finds an exact match invoice and still categorizes them as undeposited funds.  This is super frustrating.  Shouldn't it automatically go to account receivable or something like that? Terrible update.  How can I turn off automatic categorization?  Worst feature ever.  

Yes, the affected accounts when matching payments to invoices can be accounts receivable or bank accounts, @nococustomapparel. However, it could also involve undeposited funds depending on the payment mapping. Allow me to provide further details and guidance on enabling the automatic categorization feature below.

If you're connected to Clio or other third-party apps, you'll need to check the payment mapping from the app to determine if it's categorized as undeposited funds or otherwise. QuickBooks will rely on the information shared by the app. That said, if the payments or other transactions are posted to Undeposited Funds, QuickBooks will also reflect them there.

On the other hand, the option to toggle the automatic categorization feature is only available for bank transactions and is unavailable for app transactions.

If you need to turn off this feature for your bank transactions, please follow the steps below:
 

1. Go to the Transactions menu.
2. From the Bank transactions page, click the small Gear icon.
3. Uncheck the Enable suggested categorization.
   

You can check out these articles for more details on categorizing and  matching transactions in QuickBooks Online:
 

• Categorize online bank transactions in QuickBooks Online
• Match online bank transactions in QuickBooks Online
   

Additionally, for future guidance on reconciling accounts in QuickBooks to ensure they match your bank and credit card statements, you can read the following articles:
 

• Categorize online bank transactions in QuickBooks Online
• Reconcile an account in QuickBooks Online
   

Please feel free to post any questions or clarifications regarding managing your bank transactions or other QuickBooks-related queries. I'm always here to help you. 

It’s only credit card payments accepted online through the QuickBooks invoice.  Super frustrating,  me paying those cc fees shouldn’t be that hard or require extra steps.   I think I’ll move to check payments only.  Save money along the way.  Win win for me.