I understand the challenges and confusion that can arise when dealing with Undeposited Funds in QuickBooks Online (QBO), Jack. I can share some insights about this.
In QuickBooks Payments, the system automatically assigns the payments to the Undeposited Funds account. The Undeposited Funds account is a temporary account that QuickBooks uses to hold received payments from invoices before you deposit them in the bank.
Until you physically deposit the same payments at your real-life bank, the Undeposited Funds account keeps a record of payments in QuickBooks. Banks will combine all of your deposits into a single transaction. You can do the same in QBO once you have your deposit slip and know which payments your bank combined.
We can create a bank deposit in QuickBooks to get the amount out of undeposited funds. Ensure that the total amount in the deposit matches what you are moving out of Undeposited Funds.
Here's how:
- Go to +New and select Bank Deposit.
- Choose the account where you want to deposit the funds.
- From the Account dropdown, choose the bank account where you want to deposit the money.
- Tick the checkbox for the payment made that is deposited to the Undeposited Funds, and select Save and Close or Save and New.
Here is an article you can read about making a bank deposit in QuickBooks Online: Deposit payments into the Undeposited Funds account in QuickBooks Online.
The Undeposited Funds feature in QuickBooks ensures that your bank records match with QuickBooks records for easier reconciliations. For more details, please refer to this QuickBooks article: What’s the Undeposited Funds account?
When you're ready to reconcile your account to match your bank statements, run through the topics from this link as your guide: Reconcile an account in QuickBooks Online.
Never hesitate to drop by anytime you have additional questions about how QuickBooks works in accepting payments. The Community and I will be happy to help you out.
