When *Undeposited Funds appears in your QuickBooks Desktop Chart of Accounts (COA), or you see two undeposited funds accounts, it means that data was imported first, before a received payment is processed in QuickBooks Desktop Point of Sale.
*Undeposited Fund account
In QuickBooks Desktop, received payments are processed using either the Enter Sales Receipts or the Receive Payments feature. The first time either of these features is accessed, QuickBooks Desktop creates a default account called Undeposited Funds to temporarily hold payments that will be included in group deposits.
If data is imported from QuickBooks Desktop to create a file in QuickBooks Desktop Point of Sale before a received payment is processed, Point of Sale creates an Undeposited Funds account. This account is used to transfer received payments to QuickBooks Desktop during a data exchange, but it is not set up to function as the actual Undeposited Funds account in QuickBooks Desktop. The account name is transferred back to QuickBooks Desktop during the first data exchange.
When QuickBooks Desktop needs an Undeposited Funds account, it creates its own default account with full functionality. Since the name Undeposited Funds is already in use, either because Point of Sale created it, or because it was created manually, QuickBooks Desktop creates the account named *Undeposited Funds, adding the asterisk to the name to prevent a duplicate account.
Important: QuickBooks Desktop will not allow the accounts to be merged.
- Set the preference to allow you to select Undeposited Funds in receipts:
- From the Edit menu, select Preferences.
- Select Payments, then choose the Company Preference tab.
- Clear the checkbox for Use Undeposited Funds as a default deposit to account.
- Select OK.
- From the Lists menu, select Chart of Accounts.
- Right-click the Undeposited Funds account that does not have the asterisk and select QuickReport.
- Double-click one of the transactions listed on the report.
- Select the Undeposited Funds account (with the asterisk) in the Deposit To field.
- Select Save & Close. Select Yes if you are asked to confirm the change.
- Repeat steps 4 through 6 until there are no more transactions on the report. Close the report.
- Right-click the Undeposited Funds (without asterisk), then select Delete.
Note: If you receive an error, it means all Point of Sale payment items need to be modified and set to new default account prior to deleting the the duplicate Undeposited Funds account.
- Right-click *Undeposited Funds and select Edit.
- Remove the asterisk from the name, then select OK.