Clear out negative balance in Undeposited Funds

I know a way to clear out the negative balance in the Undeposited Funds account, advance2201.

QuickBooks Desktop automatically holds the funds in the Undeposited Funds account when receiving payments. To clear the amount in this account, we'll have to make deposits.

Since you created a journal entry (JE), you’ll need to delete them. Then, deposit the payment to your desired bank.

Before proceeding, I'd recommend backing up your company file before making any changes since the process can’t be reversed.

To delete the journal entries:

1. Go to the Lists menu.
2. Select Chart of Accounts.
3. Double-click Undeposited Funds.
4. Double-click the JE to open it, one at a time.
5. Press Ctrl + D on the keyboard to delete.

Once done, let’s deposit the payments. 

1. Go to the Banking menu and then select Make Deposits.
2. Choose the payment in the Payments to Deposit window.
3. Select the bank where you want to deposit the funds.
4. Click Save and Close.

In case you want to move the amount to the Misc. Income account, you can create a JE. I'd suggest consulting your accountant to know which accounts to debit and credit.

You can also learn more about how the Undeposited Funds account works in QuickBooks. This helps you ensure all the payments are tracked accurately.

Please do comment down below if you have any other concerns or questions about managing your deposits. I'm always glad to assist in any way I can.

Hi @CharleneMaeF  -

I appreciate the response and saw that recommended on another post.  This won't work for me.  I don't know if it's because it's a negative number - nothing shows up to be deposited without the JE. 

Maybe I'm missing something here?

Joining the thread to help you clear out the balance, advance2201.

QuickBooks does not allow to make a deposit if it's a negative amount. I'll share a workaround with you to clear out the amount in your Undeposited Funds account. Here's how:

1. Go back to the Bank Deposit window.
2. Add a second line and enter a positive $75 to make the amount of the deposit to zero. I'd recommend reaching out to your accountant to check what account to use in the From Account column. 
3. Click Save and close. 

Let me also share these articles for more details:

• Record and Make Bank Deposits in QuickBooks Desktop
• Deposit Payments Into the Undeposited Funds Account in QuickBooks Desktop

Add more replies to this thread if you have other questions. You can also post new questions anytime you need help with QuickBooks. 

Here are some screenshots of what I'm doing and the results.  Everything I've tried thus far has resulted in a -$75 balance for Undeposited Funds.

Thanks for getting back to us and for sharing screenshots of the transactions, advance2201.

Have you tried deleting the journal entry? Deleting the journal entry will make the balance back to -$75. Then, proceed to The Bank Deposit window.

If you see a negative amount, follow the steps that I provided above to zero out the balance. 

Just in case you're unable to zero out the balance, please contact our chat and phone support teams for us to do that. Here's how:

1. Go to the Help menu and select QuickBooks Desktop Help.
2. Click Contact Us.
3. Enter a brief description of your concern. 
4. Click Let's talk and then choose a way to connect.

More details about their contact details are discussed here: Contact QuickBooks Desktop Support. 

You can always count on us and post questions in the Community if you need help again. We're always here to guide and assist you.

advance 2201 --- Have the EXACT SAME PROBLEM in Quickbooks DESKTOP!   Error is from 2006.  NOT going to go back and adjust books as it would alter numbers, etc. for tax records.  Did you find a work around?  Can QB personnel help?

I appreciate you jumping into this thread, cindyj62.

The steps shared above were the basic solutions to fix the issue to clear out the negative balance in Undeposited Funds. Since you've tried the possible solutions above to no avail, it would be best to reach out to our QuickBooks Care Support. They have the tools to conduct a thorough investigation for a complete resolution.

You can refer to the steps shared by JenoP to reach our support. Our operating hours for chat support depend on the version of QuickBooks that you're using. Please see this article for more details: Support hours and types.

Feel free to visit our QuickBooks Help Articles page for more insight s about managing your business in your software.

Keep me posted for additional questions or other concerns. I'd be more than happy to help. Wishing you the best of luck.

You guys are missing the OP's issue.  His undeposited funds has no payment available for deposit.  You keep saying to deposit his negative payment and offset it with a positive entry, but there is no payment available, negative or positive... i have the same issue.  I believe it was an old artifact of QB POS sending transactions to QB, and subsequently now we are in QBO.

Hello there, @CRCPA.

I'm here to help you clear the negative balance on your Undeposited Funds account.

You can't deposit a negative value entry by itself. The net deposit must be greater than or equal to zero. Create a zero value deposit and associate the negative value deposit with it to overcome concerns with negative transactions in Undeposited Funds.

When creating a journal entry and offsetting the value of a negative deposit in undeposited funds, I would encourage you to consult your accountant for further guidance.

Since your undeposited funds have no payment for deposit, it is usually because accounts receivable transactions are not applied to invoices.

Review the Customer Balance Detail report to check for unapplied payments.

Here's how:

1. Click on Business overview, then choose Reports.
2. Find and select the Customer Balance Detail report.
3. Check the report to find any unapplied payments.

Once identified, add the unapplied payments in Accounts Receivable(A/R).

1. Go to Bookkeeping, select Transactions, then select All Sales.
2. On the All Sales tab, click Filter.
3. From the Type dropdown list, choose Money received.
4. Select the customer name from the list.
5. Click Apply.
6. Locate and select the unapplied payment to open the Receive Payment window.
7. In the Outstanding Transactions section, select the invoice or invoices to which you want to apply the payment into.
8. Select Save and close.

On the other hand, if they have no impact on the Profit and Loss report in your situation, you may choose to leave the balance alone. Using the appropriate accounts, your accountant can reverse the A/R balance.

Additionally, you can run and customize reports in QuickBooks Online to review various aspects of your business.

Let me know if you have additional questions about clearing out the negative balance in Undeposited Funds. You can click the Reply button below. Have a great day.

I am having this same issue in QBO going in circles creating a journal entry, attempting to applying it to the negative amount in the undeposited account which results in another amount waiting to be deposited. This problem started when we converted from QB Desktop to QBO. I've tried creating journal entries to accounts payable and bad debt to clear out the 12000 undeposited account but the journal entry shows up again waiting to be deposited even though the 12000 undeposited account is now $0. I have consulted my accountant and am ready to just write this amount off as it is not material but cannot figure out the work around in QBO. Any help would be much appreciated. 

Thanks!

Hello there, @KPCW Radio.

The essential solutions to fix the issue to clear out the negative balance in Undeposited Funds were discussed above.

The best course of action would be to get in touch with our QuickBooks Care Support because you've attempted the potential remedies above without success. They are equipped to perform a comprehensive inquiry leading to a full resolution.

You can refer to the steps shared by JenoP to reach our support. Our operating hours for chat support depend on the version of QuickBooks that you're using. Please see this article for more details: Support hours and types. 

Additionally, you can also visit our Support page if you need more tips, resources, and video tutorials. It includes information to help you manage your company files.

Don’t hold back from adding a remark below if you need further assistance with bank deposits in QuickBooks. I’m here to help always. Keep safe and take care.