Recording Deposits

Income is recorded on the invoice, not on a customer Payment or the Deposit.  So you won't want these transactions to use income accounts or you'd be double counting and messing up your books.

so leaving them as "Undeposited Funds" is fine even though they have been deposited?

Yes, it is, @adgrayiv.

Leaving it as Undeposited Funds is fine. However, you’ll want to delete the payment you deposited to the bank to avoid the fund being overstate in your bank. Moving forward, I recommend manually receiving the invoice payment in QuickBooks Desktop (QBDT).

Once you’ve received the payment manually, you can now deposit the funds to your bank account. All payments in the Undeposited Funds account automatically show in the Bank Deposit window. Let me show you how in your QBDT software:

1. Go to the Banking menu and select Make Deposits.
2. In the Payments to Deposit window, select the payments you want to combine. Then select OK.
3. In the Make Deposits window, select the account you want to put the deposit into from the Deposit to drop-down.
4. Enter the needed information in making the deposit.
5. When done, select Save & Close.

You can also check this article for more details about the process: Record and make bank deposits in QuickBooks Desktop.

I’ve also added this article that you can use for future guidance in effectively reconciling your accounts in QBDT: Reconcile an account in QuickBooks Desktop.

Let me know if you have other concerns about making deposits in QBDT, It's always my pleasure to help you out. Have a wonderful day ahead! 

Then why is it keep hanging ? Should I delete the deposit and enter again ?

Thanks for joining the thread, @BAO_Jeana17. Let me clarify things for you.

Yes, you can delete and create the deposit as long as it has not been reconciled. Doing so will help ensure that your books are balanced and accurate. 

To remove a deposit, here's what you need to do:

1. Go to the Lists menu.
2. Select Chart of Accounts.
3. Locate and then double-click the Undeposited Funds account to open it.
4. Find and then right-click the transaction.
5. Choose Delete Deposit.
   
   
6. Click OK to confirm the changes.

Once done, you can recreate the deposit. For the detailed steps, refer to this article: Record and make bank deposits in QuickBooks Desktop. Also, make sure to link the payment to the correct deposit. 

Keep me posted if you have other questions about managing your bank deposits in QuickBooks. I'll be around to help you again. Stay safe and have a good day.