Negative Undeposited funds v. Bad Debt

Hi Fabiana,

Yes, we can offset the value of a negative deposit in the Undeposited Funds and clear these balances in the A/R.

It could be that the amount in the Undeposited funds is also the amount that appears in the Bad Debts. I'd suggest consulting for an accountant so they can advise us on how to offset the negative amounts and clear these balances in the A/R.

Don't hesitate to get back to us if you have further questions about the Undeposited Funds. We're always here to help.

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@FabianaT wrote:

I have a negative balance under undeposited funds in my Balance Sheet but no "deposit" to match in the amount of ~$2K under "Bank Deposit".  I also have approx ~$2K in bad debts...can I offset one against the other and clear these balances in A/R? 

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You need to find out why you have a negative balance in undeposited funds. Undeposited funds is supposed to hold payments you receive from invoices and sales receipts.

1. what transactions have you been posting to undeposited funds?

Bad debt should have been handled using a credit memo with an item that posts to bad debt expense, then in receive payments that credit memo is applied to the invoice that is not going to be paid.

2. What was your entry for bad debt?

To clarify....we have been holding a undeposited balance for years, since 2014.  Bank statements have been reconciled monthly and tax returns filed yearly...I simply need to clear the negative undeposited amount on my balance sheet.  I thought that by off setting against the unpaid "bad debt" would "kill two birds".  

Thanks!

if you offset undeposited funds against bad debt you create an expense you do not have which lowers taxable income

Did this process actually work?  I have tried that process and the negative balance is not resolved.

Thanks for joining this thread, @cindyj62.

I’ve seen that you’ve posted twice. My colleague @Charies_M  has already addressed your concern to help you resolve the negative balance in your undeposited funds.

You can visit this link to view her suggestion: https://quickbooks.intuit.com/learn-support/en-us/banking/re-clear-out-negative-balance-in-undeposit...

Additionally, you can also visit our Support page if you need more tips, resources, and video tutorials. It includes information to help you manage your company files.

Don’t hold back to add a remark below if you need further assistance about bank deposits in QuickBooks. I’m here to help always. Keep safe and take care.