How to keep deposits from posting to undeposited funds

Welcome to the Community, @kiley-droptinest.

I'd be glad to provide information for you to keep deposits from posting to undeposited funds in QuickBooks Online (QBO).

To start with, If you want to receive payments in QuickBooks, it will default to the Undeposited Funds account, which is used to temporarily hold customer payments. However, if you want the payments to go directly to your bank account, you need to review the Deposit to field. This will help you keep track of where your payments are going. If your bank records a single payment as its deposit, you don't need to combine it with other payments. Instead, you can put the payment directly into an account in QuickBooks and skip the Undeposited Funds account.

On the other hand, if you've already matched the invoice, you can't modify or change it. To make changes, you'll just have to undo the transactions. However, If the entry is already in the Undeposited Funds account before matching it, you can simply deposit it from UF to your bank account

For future reference, you can check this article to help you reconcile your accounts so they always match your bank and credit card statements: Reconcile an account.

Feel free to click the Reply button below if you have other questions about keeping deposits from posting to undeposited funds. I'm always here to help. Have a great day.

QuickBooks doesn't let me change the account. It automatically gets applied to the customer's invoice and then is automatically deposited into the bank account. When I delete the deposit and try to match it myself, it still reverts back to Undeposited Funds. How do I change this?

Let's review your QuickBooks Payments setup together, katzengi, so your deposits flow into the appropriate bank account.

After integrating Payments into QuickBooks Online, customer payments will be deposited into the default bank account, which is the Undeposited Funds account. If you need to change this, make sure you have full access to the QuickBooks Online company file. Then, follow these steps:

1. Click the gear icon at the top-right corner of the screen.
2. Select Account and settings.
3. On the Payment tab, head to the Deposit accounts section.
4. Press the Change button to edit the direct deposit information.

For more info, you can check out frequently asked questions about QuickBooks Payments here: Common questions about QuickBooks Payments deposits in QuickBooks Online.

Additionally, here's an article on selecting accounts when recording QuickBooks Payments deposits and fees: Record payments deposits and fees in QuickBooks Online.

For future reference, here's a helpful resource on what QuickBooks reviews when a customer payment is on hold: Learn about funds on hold in QuickBooks Payments.

Please feel free to come back to this post if you have any other QuickBooks Payments concerns, katzengi. I'll be right here to address them for you and help you out if you need any further assistance. Keep safe!

Ok, I guess I did not explain my issue properly. Sorry. This is the issue. The payment is deposited automatically into the correct bank account. The payment will have the customer's name but instead of posting to the A/R account it posts to Undeposited Funds. The money is correct to where it should be deposited. I don't need to change the bank account; it is the posting account that is incorrect. I've tried to delete the payment from the register to manually match the payment to the customer's invoice. When I do this, I get an error message that states I cannot change the account from Undeposited Funds. This messes up my Sales reports that I use for state taxes. How do I get the deposit to post to AR or, at the very least, how can I manually match the payment to the customer's invoice so that I can change it to the corrrect account? Thanks!

We appreciate the additional details you've shared, @katzengi. I'm here to help you further with your deposit concern in QuickBooks Online (QBO).

As mentioned above by my colleague AnneMariee, the Undeposited Funds (UF) account is the default account for posting. Just to clarify, changing it is not possible. But if you turn on the auto-matching feature on the banking page, QuickBooks will do the matching for you.

In addition, payments will be posted first to the Account's Receivable (A/R) account to link to the open invoice. Then, will be posted to UF afterward.

To clear the payment in the UF account, you'll have to create a bank deposit for it. Here's how:

1. Go to +New and select Bank deposit.
2. Choose the bank account where you want to put the money in the Account dropdown.
3. Tick the box for the transactions that you want to combine.
4. Select Save and close.

Furthermore, you can follow this article on how to manually match your transactions to choose a specific account: Match online bank transactions in QuickBooks Online.

Additionally, ensure to reconcile your accounts to keep them accurate and up-to-date.

Let us know if you have other concerns with your deposits in QuickBooks. We're here to help you in any way we can.