Undeposited Funds

Hi there, vytronaccounting.

Thank you for visiting again the QuickBooks Community. I'll be sharing details on how accounts in QuickBooks works. Then, make sure that you're able to make a deposit from the undeposited funds.

When you set up a company file, QuickBooks automatically adds accounts to your chart of accounts. This is based on the type of business or your industry for better tracking. Also, everyone gets the same set of standards accounts so you can make changes to the existing or add new ones. This is to ensure that you properly record how much money your company has and owes, and the money that comes in and out.

To recognize the payments made to the Undeposited funds account, I suggest activating the deleted account that QuickBooks automatically created. Then, merge to the imported undeposited funds you've made.

Here's how to make the account active.

1. Go to the Lists menu and select Chart of Accounts.
2. Choose the Include inactive checkbox.
3. Right-click on the account you want to make active again. Then, select Edit Account.
4. Clear the Account is inactive checkbox.
5. Click Save & Close.

Once done, you can now merge the two undeposited funds to keep your lists and transactions accurate. You may refer to this article to see the steps on how to perform the process: Merge list entries in QuickBooks Desktop.

Lastly, you may open this article to view different details on how the accounts in the Chart of accounts page give you various account types to categorize transactions: Learn about the chart of accounts in QuickBooks.

If you have any other questions about exporting/importing IIF files, please let me know by adding a comment below. I'm more than happy to help. Keep safe!

I am afraid I did not make the default undeposited funds account inactive, I deleted it. So when I show inactive accounts, it is not present. Is there a way to recover deleted accounts? (We have not had any transactions yet, which must be the reason I was able to delete the account)

Hey, @vytronaccounting. 

Thanks for spotting by again! Allow me to show tell you some additional information. 

If you've deleted the account, then you'll need to restore a previous backup to before it was deleted. The other option would be to re enter the account that's missing. 

Please review these options and try them. Let me know how it goes after doing so. I want to ensure this gets taken care of today. Bye for now! 

Is it possible to re enter a default account? The problem I am running into is that the original undeposited funds account was created by QuickBooks, not me, so I don't know how to re enter it so that the system will know to look there for deposits.

I've got your back, @vytronaccounting.

Yes, you can re-enter a deleted default account in QuickBooks Desktop (QBDT). I'll be happy to guide you through the steps.

1. Open your QBDT company file.
2. Go to the Lists menu, then select Chart of Accounts.
3. From the Account drop-down, choose New.
4. Click Other Account Types and then select Other Current Asset from the drop-down.
5. Select Continue.
6. In the Account Name field, enter Undeposited Funds. Then, add an Account No. if you want to.
7. Click Save & Close.

I'm adding this article for more guidance: Add, edit, or delete accounts in QuickBooks Desktop.

You might want to learn how the Undeposited Funds account works in QuickBooks. This article will provide you the detailed information: What’s the Undeposited Funds account?

Please let me know if you need clarification about this, or there's anything else I can do for you. I'll be standing by for your response, @vytronaccounting.

Thanks Mark. I am able to re enter an undeposited funds account on my own, but I suspect that it will not perform the function that I am hoping. I would like to be able to record deposits, but my understanding is that QB will only allow you to record deposits from payments you received to the undeposited funds account. 

In other words, even when I create a new undeposited funds account, I will not be able to use it like the default undeposited funds account that allowed me to record deposits from the undeposited funds account. QB will not know to look to the new undeposited funds account to see which payments have not been deposited. Am I correct in thinking this will be an issue?

Thanks for getting back to us, @vytronaccounting.

I'll share some information about the Undeposited Funds account. In QuickBooks Desktop (QBDT), you'll have the option to remove the use of the default Undeposited Funds account. That way, you can choose your created undeposited account to record your customer deposits. Let me guide you how.

To remove the default Undeposited Funds account:

1. Go to Edit, then select Preferences.
2. Choose the Payments tab, and then tap the Company Preferences tab.
3. Remove the checkmark next to Use Undeposited Funds as a default deposit to account. See the image below.
4. Click OK. 

With the above steps, you're now able to select your newly created undeposited funds account when recording deposits. Please check out these articles below to guide you along.

• Deposit payments into the Undeposited Funds account in QuickBooks Desktop.

• Record and make bank deposits in QuickBooks Desktop.

I'm also attaching this link in case you need help with reconciling your account. Feel free to browse: Reconcile an account in QuickBooks Desktop.

Reach to me again through this thread if you still have questions or concerns with customer deposits. I'll be around for you. Take care and have a nice day ahead.

I have attached a screenshot of the function I am trying to perform. Will I be able to do this if I do not have the QB created undeposited funds account? It does not seem to be possible with it deleted, but I would like to be able to do it.

So I had the same problem.  But I got QB to create undeposited funds account for me. Not sure how but it did it. 

I made a undeposited funds account.  I went to preferences and clicked make  "use undeposited funds as a default deposit to account"  I wanted to see if it would work with a couple of payments I received.  Funds went into that account but wouldn't bring it up on the make deposit.  I did that multiple time with no luck.  Then I decided I'd go back to my old deposit ways of straight to the bank account.  I unclicked the "use undeposited funds as a default" and change my payment back to the bank account.  I went into the chart of accounts to inactive my created undeposited funds account and found *undeposited funds.  The * means that it is the default account.  Tried it again on the payments and it came up on the make deposit.  

Hope this makes sense and helps.  

I have reconciled all my accounts.  Somehow I stll have 200ish deposited in undeposited funds, The funds have are cleared at the customer level, but many still  considered open invoices.  I hope I was able to explain my self Basicly, as far as I know (not an account) they serve no purpose or I dont know that they do.  Not sure how some were cleared and others were not.  HELP!  Thnaks J

Let me share some information about undeposited funds and deposits, jac. 

An undeposited funds account is to hold invoice payments and sales receipts you want to combine. It's like a lockbox (or drawer) where you store payments before taking them to the bank. On the other hand, deposits are to combine multiple transactions into a single record so QuickBooks matches your real-life bank deposits.    

To address the deposits stored in Undeposited Funds, you haven't recorded them in QuickBooks after depositing the money to your financial institution. The invoice is paid but isn't posted in QuickBooks yet. 

It's possible to rectify this, but it's best to consult your financial professional. If you decide to proceed with the modification, check if there are any changes with the reconciliation, if there are, you can reconcile previously deleted and re-entered checking or credit card transactions. 

Regarding the open invoices, it might be that you directly entered the deposit without linking the invoices. To get started, we have to edit the deposit first. 

Here's how: 
 

1. Go to Lists. 
2. Select Chart of accounts. 
3. Choose the bank account, and search for the deposit. 
4. Then, select the transaction. 
5. Click Save & Close. 

Afterward, we can apply the deposit to your invoices. 
 

1. Go to the Invoice page. 
2. Then, click the Receive Payments button. 
3. Choose Apply Credits. 
4. Select the deposit. 
5. Click Done, then Save & Close. 

For future reference about the different processes involved in making payments, visit this article: Resolve common issues when applying a payment towards an invoice. 

Please don't hesitate to comment below, if you have additional concerns about managing your invoices and deposits. We're always here to help.