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QuickBooks Online uses a temporary account to hold cash, checks, etc. before you deposit them into the bank.
Undeposited Funds is a holding account for the money you've received and intend to deposit but haven't deposited yet.
You'll want to add a bank account without connecting it to the online banking feature in QBO and deposit the checks from the customer's invoice. I'll walk you through how:
- Go to the Accounting menu.
- Select Chart of Accounts.
- Click the New button.
- Fill in all the necessary details (i.e. Account Type, Detail Type, and Name) of your account.
- Select Save and Close.
Here's an article for more details: Add an account to your chart of accounts in QuickBooks Online.
Now that you have your bank account in QBO, you're now ready to deposit the checks sitting in the Undeposited Funds account. Here's how:
- Click + New and select Bank Deposit.
- From the Account ▼ dropdown, choose the account you want to put the money into.
- Select the checkbox for each transaction you want to combine.
- Make sure the total of the selected transactions matches your deposit slip. Use your deposit slip as a reference.
- Select Save and close.
Once you're all set, you can now be ready to reconcile the account.
I include some resources about depositing payments into undeposited funds as well as recording payments deposits in QBO:
That's it! If you have additional questions about the process, just post them here. I'll be happy to assist you again.
