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Level 2

Negative Undeposited Funds & Journal Entries

We've had 2 journal entries stuck in our Bank Deposit page for almost 2 years. When looking at the Undeposited Funds register, I see that the balance has mostly always remained in the negatives (I've looked as far back as 2014) and that the journal entries for 2018 were to zero out the UF account so that now it properly increases with payments and decreases with our deposits. In my research, someone suggested to deposit these journal entries to a clearing account and create another journal entry from that clearing account, however, when I make the deposit it brings the UF account back into the negatives. How can I get rid of these journal entries stuck in the Bank Deposit, while keeping the UF account balanced? 

5 Comments
QuickBooks Team

Negative Undeposited Funds & Journal Entries

Hi there, SG91.

 

To follow through to the suggested by someone you mentioned, you'll need to deposit those journal entries to a clearing account. To do this, you'll need first to create a new journal entry from the clearing account to transfer the amount to Undeposited Funds. Then, make sure to select the old and new journal entries when depositing those transactions. I'd recommend consulting an accountant for guidance so your account stays accurate.

 

Here's how to create Journal Entry:

 

  1. Select + New.
  2. Under Other, choose Journal Entry.
  3. Enter the transaction date in the Journal date field.
  4. From the first line in the Account column, select the Undeposited Funds account.
  5. In the Debit column, enter the single line deposit amount.
  6. On the second line in the Account column, choose the bank account.
  7. In the Credit column, re-enter the single line deposit amount.
  8. Hit Save.

 

For additional information about how to offset the value of a negative deposit in Undeposited Funds, you can click this article: How to clear negative entries from Undeposited Funds and the Bank Deposit screen.

 

Please refer to the articles below on how you can generate a report that shows your total Undeposited Funds. Then, to see more information about Undeposited Funds account and how to combine multiple payments together in QuickBooks.

 

 

Should you need further assistance, please do not hesitate to post again by clicking the Reply button below. I'll be glad to work with you again. All the best!

Level 2

Negative Undeposited Funds & Journal Entries

Thank you for the reply, but I'm not sure I understand yet. It sounds like you want me to make the deposit of the journal entries in the Bank Deposit page, then reenter another journal entry in UF? Wouldn't that just put it right back into the Bank Deposit page? I asked the accountant about this but he says it is just double entry deposits and errors over the years making the UF negative and he was correcting UF register with the journal entries, but he says he doesn't know how to get it out of the Bank Deposit since the journal entries aren't connected to specific customers. I looked at that first link you provided, but I don't understand that either. "Select the payment and the Journal Entry you created. The total should be zero." It says to select the payment and the journal entry for a total amount of zero, but there is no other payment in the Bank Deposit, only the Journal Entries that balance out the UF register.

QuickBooks Team

Negative Undeposited Funds & Journal Entries

Hi there, SG91.

 

Thank you for coming back and for providing what you've performed to fix the issue. I'll provide some clarification I shared above.

 

You'll need to create first a new journal entry from the clearing account to transfer the amount to Undeposited Funds. Then, you'll have to record a deposit and select the old and new JE to offset the value of a negative in Undeposited Funds. Please note that even the journal entry aren't connected to specific customers, the entry will still show in the Bank Deposit as UF. You'll have to make sure you choose those entries when depositing them to make the UF balance.

 

Then, I have updated the answer above to follow through on using a clearing account to remove the pending in your undeposited funds.

 

 Please know I'm always around to help with any QuickBooks issues you may be having. Take care!

Level 2

Negative Undeposited Funds & Journal Entries

I'm not sure what it is that I'm not understanding, but I've tried several different ways to follow your advice and no matter what I do, the problem persists. If I do a Bank Deposit, even with the journal entries to offset the negative, the Undeposited Funds register will just go back into the negatives. The only way to keep Undeposited Funds balanced is to leave the journal entries in the Bank Deposit screen and this doesn't seem like a solution.

QuickBooks Team

Negative Undeposited Funds & Journal Entries

I can see the importance of clearing out the journal entries in the Bank Deposit page in QuickBooks Online (QBO), @SG91. That's why I'm here to guide you on the steps you need to take care of this.

 

There are times that negative value transactions in the Undeposited Funds (UF) account will appear on the Bank Deposit screen. However, the journal entries shouldn't remain on the said page since they're created to offset the negative values in the UF account. To resolve this, you'll have to first generate a report that shows your total UF. This way, you're able to review the accounts associated with the journal entries. Here's how:

  1. Go to the Accounting menu.
  2. Choose Chart of Accounts.
  3. Locate the Undeposited Funds account.
  4. Under the Action column, select the drop-down arrow, then choose Run report.

 

I've attached a screenshot below that shows the last two steps.

 

Once done, verify that the journal entries were created based on the correct way of offsetting the negative values from the UF account. You can refer to this article for the step-by-step guide: How to clear negative entries from Undeposited Funds and the Bank Deposit screen.

 

In case the issue persists even after verifying the accounts and performing a bank deposit with the journal entries, I'd recommend contacting our Customer Care team. They can securely pull up your account and further guide you with a fix. You'll first have to check out our support hours to ensure we can assist you on time. Here's how to schedule a callback to talk to one of our representatives:

  1. Go to the Help menu.
  2. Choose Contact Us
  3. Enter your specific concern in the What can we help you with? box. 
  4. Click Let's talk
  5. Select Get a callback. 
  6. Enter your contact details. 
  7. Click Confirm my call

 

I've attached a screenshot below for your reference.

 

After that, I'd also recommend reconciling your accounts every month. This is to effectively monitor your income, expenses, and the growth of your business: Reconcile an account in QuickBooks Online. It also includes instructions about editing completed reconciliations.

 

In the meantime, I'm adding this article to further guide you in managing your business through QBO: Help Guide. It contains links for video tutorials, webinars, and articles to name a few.

 

Please know that you're always welcome to comment below if you have other concerns or follow up inquiries about managing your financial accounts and transactions in QBO. I'm just around to help. Take care.

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