Banking

Undeposited Funds and Bank Accounts refer to different concepts. I'm here to provide the distinction between the two to guide you through the process, LCUUF.

The Undeposited Funds is a temporary account used to hold payments you receive but have not yet deposited into your bank account. This serves as a holding area for cash or checks that you plan to deposit.

While bank accounts like checking, savings, and petty cash accounts represent actual bank accounts that your business owns and the real money available to the business. 

When you receive a payment in QuickBooks, it is automatically recorded in your Undeposited Funds account. When you're ready, you can consolidate all payments into a single deposit transaction to your bank account.

You'll also have the option to select the Cash Box account. under the Deposit To field at the time of receiving the payment. This allows you to allocate the amount directly to the Cash Box account instead of placing it in Undeposited Funds. I've added a screenshot for your visual guide:

Next, move the amount from the Cash Box account to your actual bank account.

To give you an overview of how Undeposited Funds works, check this article for more details: Deposit Payments into the Undeposited Funds in QuickBooks Online.

Additionally, learn how to categorize downloaded transactions once you connect your bank. Go through this article for reference: Categorize Online Bank Transactions in QuickBooks Online.

Post your reply below if you have any other follow-up questions about Undeposited Funds and bank deposits. I'll be one post away if you need further assistance.