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lindak1119
Level 7
October 16, 2018
Solved

How do I create a new Undeposited Funds account?

  • October 16, 2018
  • 42 replies
  • 143 views

Somehow I setup my Undeposited Funds Account with the detail type of "Other Current Asset". Thus, when I deposited checks into the Undeposited Funds account, the checks weren't showing up in the Bank Deposit window. When I try and edit the COA details to make the detail type Undeposited Funds, or if I try and create a new COA entry as an Undeposited Funds account, I recieve this error message : "Something’s not quite right

You cannot change the detail type of an account to be Undeposited Funds or change an Undeposited Funds detail type account to be another detail type."

How can I get around this?
Best answer by lyndaartesani

You did not set that up. It is a default acct.  And you cannot create a second one that will work. Use the one you have.

When you receive a customer payment and have it deposit into that acct, the next step is to go to +bank deposit to clear undeposited funds and deposit the $ into the bank acct. That is the step you are missing.

42 replies

A
Anonymous
October 16, 2018
Did you manage to find or create a new Undeposited Funds accounts? I am having the same issue. I've checked every single account in my chart of accounts, but none of them has a detail type of the undeposited funds. It just doesn't exist :/
    M
    Malcolm Ziman
    Level 4
    October 16, 2018
    The Type (2nd column) is Other Current Assets, so just look in that group.  If not there, did you try and create a new account with Type of Other Current Assets and Detail Type of the Undeposited Funds?
    lyndaartesani
    lyndaartesaniAnswer
    Level 4
    October 16, 2018

    You did not set that up. It is a default acct.  And you cannot create a second one that will work. Use the one you have.

    When you receive a customer payment and have it deposit into that acct, the next step is to go to +bank deposit to clear undeposited funds and deposit the $ into the bank acct. That is the step you are missing.

    M
    Malcolm Ziman
    Level 4
    October 16, 2018
    OK educate us. What do we not know?
    T
    Teri11_2
    Level 2
    February 6, 2019

    @Teri11_2

     

    This is Exactly why you use UF: "so bank deposits should not be recorded until they have actually been DEPOSITED in your bank."

     

    Example: Your customer invoices are supposed to be paid by the 10th. You get their payments on the 8th-10th, but don't go to the bank until the 12th. The Banking date is Not the date the customers paid; that would imply they all paid late. The Payments flow to UF, which is a Holding account for "funds in transit" and when you make the deposit for the 12th, you select the transactions pending to be part of a deposit. And the Payment date is not the Banking date, either, and they didn't get deposited One at a time over those days. You need to match reality.

     

    "This account exists only in QB, I have never seen it elsewhere in 35 years of doing accounting."

     

    UF is a specific Holding account in Assets to reflect Funds in Transit; and the transaction In is the same transaction Out, because it is a self-managed account. And yes, auditors are familiar with Holding accounts and Funds in transit; you've likely seen the words Suspense or Clearing. In reality, if you have a big envelope of Undeposited Funds in your desk's locking drawer, then by definition, they are Undeposited Asset. And the QB tools are Functions for this; we don't need to manually deal with Suspense. We already have a built in tool: UF as an Asset.

     

    If you hold them in a safe, then you should be managing the Safe as a Bank Type of account and the customer payments would post to Safe Bank directly and the deposit later is a Transfer from Safe bank to Operating Checking bank. Because the bookkeeping should match your reality.


    I understand how the account works, I just never use it so I would not encourage setting up more.    Definitely QB unique from what I have seen and don't think it is a good practice to follow.  Surely not something large companies do.  I cannot recall the last time I went to an actual bank in person but I think it was the day I opened my business bank account in 2008 and the last paper check I saw was years ago as well. 

    lyndaartesani
    lyndaartesani
    Level 4
    October 16, 2018

    Someone must have renamed the default one.  You cannot delete the default one, so it has to be there.  Look for it in your chart of accts list.

    L
    lindak1119Author
    Level 7
    October 16, 2018
    Well Lynda it's not there in mine either!!!!!
      B
      BC58
      February 9, 2024

      I don't have an Undeposited Funds Account either!

      D
      DEBookkeeping
      September 10, 2019

      The undeposited funds account is a temporary account for funds in your possession or waiting in the cash register to be deposited. Company owners that wait, say a week to go to the bank, will hold the money in a safe until taken to bank.

      So not to lose control and be able to close daily sales, the amount is sent to the current asset “undeposited fund” account. This amount will show in the balance sheet as part of the assets of the company.

      So to begin with you properly created the transit account like you mention.

      There is one step pending.

      Once the money and checks are sent to the bank, there has to be a transfer made from “undeposited funds” to the “bank” account.

      So the steps are as follows #1 create the transit account, #2 transfer funds when deposit to bank account is done

      So step #1 as follows:

      #1 How to create a new Undeposited Funds account

      Go gear (top right) / Cart of accounts / new

      Or

      Left down to Accounting / Chart of accounts / New

      Account Type: Current assets

      Detail Type: Undeposited Funds

      Name: Description of your choice

      Save

      Step #2 the transfer

      #2 Go to Gear (top right) / Transfer

      Transfer Funds From: Undeposited funds account

      Transfer Funds To: Checking account

      Transfer Amount: Amount to transfer

      Date: Date of Transfer

      Save

      S
      Steven Lima
      September 11, 2020

      The Undeposited Funds account is Created by checking the box under:

      Edit - Preferences - Payments -Company Preferences - Use Undeposited Funds as a default deposit it account.

       

      I found this issue while trying to print out Deposit Slips for customer payments.

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