I am confused and needs a workflow spelled out for me. I have a client who sent an invoice to a customer. They paid it online through Quickbooks Payments with a credit card or ACH transfer. On my end I see that the payment was paid and eventually deposited into the correct bank account with a bank receipt done automatically through Quickbook payments. However, the payment is still in Undeposited Funds? Why? I need to understand why this was happening so we can correct any Quickbook payments in the future. I right now have a huge undeposited funds account. All I am looking for is how Quickbook payments work and why after they show deposited in the bank are still in undeposited funds.
Hi there, jsanterre50,
Thanks for elaborating the situation and sharing how you've processed the payments from the Merchant Account into QuickBooks Online. I have just the workflow you need to record the transactions.
Once your customers pay you via QuickBooks payments, the invoices created in QBO will automatically be marked as paid. Then, those payments will be posted in the Undeposited Funds.
To remove them from the Undeposited Funds account, make sure to link these payments to the deposit you'll be creating. This way, the money will move to your actual Business Bank account.
Check out this article for a more detailed steps:
You can opt to remove the deposit you've first created and proceed with this process. To do so:
With these steps and resources, you can successfully record the payments in QuickBooks Online without them getting stuck in the Undeposited Funds account. Please keep in touch with me here should you have any further questions or concerns. Wishing your business continued success!
Thank you for responding. I however still have a question.
If quick book payments is automatically making a bank deposit and a bank receipt by depositing the QuickBooks payment done by CC or ACH into the correct bank account why is it still showing in undeposited funds? Is there a step that the client is missing with each QuickBooks payment and what is that?
I assume that since QuickBooks payments did everything there was nothing for the customer had to do but match it on their Bank downloads.
You'll want to choose the correct bank account to record your payments from the settings, jsanterre50.
Here's how to get there:
Doing these steps will auto-update and auto-deposit your money into your bank account.
You can always swing by whenever you need help with anything else.
I was reading the info related to QBO payment merchant workflow and I am not sure the question as to why if QBO deposits the funds in the corresponding bank a/c, why then the funds still show on undeposited funds. If QBO matches the invoice to the deposit.
In my case I see that my client has two entries on undeposited funds: (1) payment and (2) deposit. May I know why and how to properly follow the flow.
In an effort to understand the process we undid the deposit; however, this didn't change the total undeposited funds balance it has now created two additional entries without an invoice number with a credit to A/R which when trying to delete it says that I have to undo the deposit when the deposit is correct. It is the duplicate that is incorrect. Appreciate your assistance
Hello, let's sort this out, @mybills11.
QuickBooks Online automatically records deposits and fees for your QuickBooks Payments transactions. Make sure that you have configured QuickBooks Payments account to match and designates automatically. You may check if the appropriate accounts are selected.
Ensure that the deposit account selected is the same account received payments get deposited to. It should also be the same account where fees are deducted from in real life. For reference, you can check this article on how Undeposited Funds account work in QuickBooks: Deposit payments into the Undeposited Funds account in QuickBooks Online.
In your case, you've created the deposit as an income account, which is why it duplicates your deposits.
To fix this, you can check for duplicates in the bank register and remove them from there.
Let me show you how:
Additionally, I'll share with you some articles on how you can handle the funds that show in the Undeposited Funds:
If you have other questions, feel free to place a comment here. I can help you anytime. Take care!