Customer Payments and Undeposited Funds

Good morning, @DA2018.

How are you doing today? I hope you're doing well. 

Typically when payments are deleted from QuickBooks, it's important to make sure the date is correct when adding it back. Since it sounds like the transaction isn't reconciled, you can always use our mini reconciliation process to get it cleared. 

This "mini reconciliation" method uses an "off-cycle" reconciliation date to make a correction. 

Here's how to fix the transaction if it's listed in a bank account: 

1. Choose the bank account with the transaction(s) you need to reconcile.
2. In the Date of Statement field, enter date for an "off-cycle reconciliation." This date can be any date between your last reconciliation and the next scheduled one.
3. In the Ending Balance field, enter the balance of your last successful reconciliation. Then select Continue.
4. In the Reconcile window, check off the transactions you are fixing and re-reconciling.
5. Make sure the Difference field shows $0.00.
6. When everything looks good, select Reconcile Now.

Note: When you enter an "off-cycle" date, QuickBooks will remind you that you're doing a mini reconciliation. This puts previously unreconciled transactions back without affecting the "cycle" that they follow.

If the transaction is listed in a credit card account:

1. Choose the credit card account with the transactions you need to reconcile.
2. In the Date of Statement field, enter date for an "off-cycle reconciliation." This date can be any date between your last reconciliation and the next scheduled one.
3. In the Ending Balance field, enter the balance of your last successful reconciliation. Then select Continue.
4. In the Reconcile window, check off the transactions you are fixing and re-reconciling.
5. Make sure the Difference field shows $0.00.
6. When everything looks good, click on Reconcile Now.

After you tap on Reconcile Now, QuickBooks asks if you want to Create a Payment Check or Create a Bill to Pay Later.

1. Click on Create a Bill to Pay later.
2. If you need to, print your Reconciliation Report for your records.
3. After you print the report, a bill appears on the screen. The bill amount will be the balance you just reconciled.
4. Hit Clear. This removes all info from the bill.
5. Close the bill
    

This balances the account. QuickBooks won't create a bill so your credit card balance isn't affected.

Please know you should always check with your accounting professional before making any changes to your account. Your accountant can advise the best way to handle the transaction based on your business needs. If you don't have an accountant, don't sweat it. You can find one here in our Resource Center. 

That should do the trick. If you have any additional questions or concerns, please don't hesitate to let me know. Have a good one! 

Dear Tori B,

Thanks for that detailed response.  However, as the payment was not actually processed by the AR employee, the funds never made it to the bank account.  But the fictitious payment sat out in the Undeposited Funds account until the customer themselves discovered that it had never been debited from their bank account and they made a replacement payment.  That's when my AR employee deleted the original payment from the system and recorded the replacement payment, not realizing the effect that would have on the prior period financials.

So what I did was to re-record the original payment to the account.  Then I unapplied the replacement payment and re-applied the original (fictitious) payment to the invoice.  Then, I created a replacement invoice on the account and applied the replacement payment to this invoice.  But, this leaves the balance sheet's Undeposited Funds account with more money in it than it should have (which has apparently been going on since the fictitious payment was originally recorded several months ago).

How do I journal those funds out of the system, since they're not real?  That's what I really need to know.

Thank you,

Desperate.