Managing your Undeposited Funds account

Overview

The Undeposited Funds account holds invoice payments and sales receipts you want to combine before taking them to the bank.

What is an Undeposited Funds account in QuickBooks?

An Undeposited Funds account acts as a temporary lockbox (or drawer) to keep your payments in until you record a formal bank deposit.

Why use the Undeposited Funds account

When you put money in the bank, you often deposit several payments at once. For example, let’s say you deposit five US $100 checks from different customers into your real-life checking account. Your bank records all five checks as one US $500 deposit.

Because of this, you need to combine your five separate US $100 records in QuickBooks to match what your bank shows as one US $500 deposit.

This two-step process ensures QuickBooks always matches your bank records and makes your reconciliations much easier.

Check out QuickBooks Payments rates and apply. Then, you can automatically process payments, deposit funds and record transactions in your books.

How it works

1. Sends invoice payments and record sales receipts to the Undeposited Funds account.
2. When you have your deposit slip, make a bank deposit in QuickBooks to combine the payments in the Undeposited Funds account to match your real-life deposit.

Important notices

• Bank downloads: You don’t need to use the Undeposited Funds account if you’re downloading transactions directly from your bank.
• QuickBooks Payments: Check out QuickBooks Payments rates and apply. With this service, you can automatically process payments, deposit funds, and record transactions in your books without manually combining them.

Related links

Learn how to use the Undeposited Funds account in QuickBooks Online.

Learn how to use the Undeposited Funds account in QuickBooks Desktop.