I am working with a new client and upon reconciling her bank account going back 2 years I found many many unreconcilable transactions - I realized that these were all cash payments that went into the checking account instead of undeposited funds. So they have recorded the income twice - once when she recorded she received the payment to her checking and once when she deposited the funds and didn't match it to anything. Needless to say the checking account balance in QB is off by 10's of thousands of dollars and desperately needs to be fixed.
The only way I can think of to fix this is to literally go back and undo all of her banking deposits that are were not matched to anything, re route all of her cash payed invoices to undeposited funds, and then cross my fingers and hope QB can match the deposits in the bank feed to the undeposited funds and re add all of them (this time matched).
We are talking about hundreds of deposits and invoices....first of all I am not confident it will work, second of all this sounds like its going to take HOURS...so I am throwing it out there to the community...does this sound like the right thing to do and/or is there a quicker way?
Based on the details you've provided, the income has been overstated, lmancini220.
You are correct that you'll have to undo each deposits. If this is from the Banking page, you can undo multiple deposits at once: Unmatch or move bank transactions after reviewing them.
If these deposits were recorded manually, you'll have to go to each of them and delete manually.
Then, you'll have to go each invoice payments and change the Deposit to field to Undeposited Funds. After correcting the invoice payments, you can already create bank deposits: Record and make bank deposits in QuickBooks Online.
Lastly, you can already match the deposits to the ones in the Banking page: Categorize and match online bank transactions in QuickBooks Online.
Quicker way to do this would depend on an accountant's suggestion. I'd recommend consulting one to ensure we are doing everything correctly.
Let us know if you need anything else. Have a great day!
Looks like the default account on "receive payments" is the checking account, I thought this was suppose to default in "undeposited funds" to prevent this from happening? How do I get that corrected?
Every account used in a transaction such as receive payment is based on the last one you've created. Let's turn on the automation to accomplish this.
In addition, here's an article you can read to learn more about the steps: How to use auto-recall to pre-fill transactions?
Lastly, you can also browse for the content of this helpful article in creating a document showing all your customer's transactions: Create and view customer statements.
If there's anything else that I can help you with, please let me know in the comments. Stay safe!
Thanks! I went for it - I was only able to match about 25% of them. Another way I am thinking about doing this is marking all of the unmatched payments as going into "owners personal pay" and recording a closely similar number of unmatched deposits as "owners investment." SMLLC makes it okay to do that...
I ended up seeing the solution to this in a QB webinar - once all of the payments are in undeposited funds, go to +new deposit, select all of the un deposited funds (in whatever time frame you want to work within) and then add a negative amount to the deposit from the "sales" account, so the deposit is 0. It creates a negative entry to the income account and clears out your UD without adding a transaction to the bank account.