Space for pervasive banner when authenticated
Deposit payments into the Undeposited Funds account in QuickBooks Online
Record payments you haven’t deposited at your bank in your Undeposited Funds account. Once you’ve deposited at least two or more payments, you can record them as a single deposit to another account.
You only need to use this account if:
You’re depositing more than one payment at a time at your bank. If not, you can record the payment directly in another account.
You haven’t connected your bank and credit card accounts to QuickBooks, so QuickBooks doesn’t have your bank info.
If your invoice payments aren’t being processed with QuickBooks Payments.
QuickBooks takes care of invoice payments processed with QuickBooks Payments for you. You don't need to put these in Undeposited Funds. If you need to combine payments processed outside of QuickBooks Payments, follow the steps in the next sections.
With QuickBooks Payments, you can see when customers view and pay invoices, and get an up-to-date picture of your cash flow to make smarter financial decisions. Learn more about QuickBooks Payments.
Video transcript
[0:00] Once your customer pays your invoice, you need to record it in QuickBooks. Let's go over two ways you can receive payment and how to properly use the undeposited funds account to keep your books accurate. The first way you can receive your payment is to select Customer Hub from my apps. Then select Customers. This shows your customers list.
[0:22] Just find your customer and you will see the money they owe you here. To receive a payment, you can select Receive payment right here. However, another way to receive payment is to select Create, and then select Receive payment. Then enter the customer's name. QuickBooks displays any open invoices for that customer. Select the checkmark box for the invoices the customer is paying.
[0:49] QuickBooks assumes that the customer is paying the entirety of the invoice, but if this is a partial payment, you can change the payment amount. Next, record how the customer paid you. If you don't see their payment method listed, just select Add new, and add it. This customer is paying with a check.
[1:08] You don't always need to record a reference number, but since this customer is paying with a check, let's record their check number. Let's select Undeposited funds so we can combine it with other payments later. The Undeposited funds account is a temporary account that holds payments you plan to deposit later at the bank.
[1:26] An undeposited funds account is important, because it allows you to easily combine several payments together into a single deposit. If you don't combine deposits, then you can skip this and just select your bank account. Then select Record and close. Now, this customer has a $0 balance since they paid their invoice. If you recorded the money going directly into a bank account, you're done.
[1:50] But if you used undeposited funds, you'll need to record the deposit after you put it in the bank. To see this process, watch our video on how to record a bank deposit. Now try recording an invoice payment of your own.
Prerequisites
Before you continue, find your Undeposited Funds account in your Chart of accounts. This account can be renamed, so check the Detail type column for "Undeposited Funds."
Go to All apps 
, then Accounting, then Chart of accounts (Take me there).
Put payments into the Undeposited Funds account
Select + Create.
Depending if you’re recording an invoice payment or a receipt for one, select Receive payment or Sales receipt.
Select the customer from the Customer dropdown.
If you’re recording an invoice payment, select the checkbox for the invoice you’re receiving payments for.
From the Deposit to dropdown, select the account you’re using for undeposited funds.
Fill out the rest of the form.
Select Save and send, Save and new, or Save and close.
Reminder: QuickBooks takes care of invoice payments processed with QuickBooks Payments for you.
Next steps
When you deposit your payments at your bank, the bank often records it as a single transaction. You should get a deposit slip.
Use your deposit slip to record a bank deposit and combine the payments in QuickBooks. All payments in the Undeposited Funds account automatically appear in the Bank Deposit window.
Related links
Sign in now for personalized help
See articles customized for your product and join our large community of QuickBooks users.
Call Sales: 1-800-365-9606
