How To Receive Payments by Using QuickBooks Undeposited Funds Account

How to Clear QuickBooks Undeposited Funds?

What are Undeposited Funds in QuickBooks?

The QuickBooks Undeposited Funds feature in QuickBooks holds your payments that are received from invoices and customers before you deposit the payments into the bank. This feature is very useful for QuickBooks users who are not using QuickBooks Payment services and process their payments from external sources. 

In other words, the payee will send the payment through invoice first, then the amount will be held into the Undeposited funds of QuickBooks and lastly, you will deposit the payment into your bank. This Undeposited funds account will act as a safe medium that will guard your invoices until you deposit the payments successfully in your bank account.

Why You Should Use the QuickBooks Undeposited Funds?

There are many benefits of the QuickBooks Undeposited Funds accounts such as:

  • QuickBooks Undeposited Funds will be shown under the head of ‘Other Current Assets’.
  • QuickBooks Undeposited Funds acts as a saving drawer that holds your payments until you deposit it into your bank. 
  • This QuickBooks feature is designed in such a way that it will work with both the bank deposits and receiving payments to finish the processing of invoices and bills. 
  • You can also use the QuickBooks Undeposited Funds workflow with both single and grouped payments. In other words, if your bank is recording group payments, you should also record your payments group-wise in your QuickBooks accounts. 
  • The Undeposited funds will help you in avoiding unnecessary headaches you get while reconciling numerous transactions at the end of each month. This feature is designed to help you manage and track the transactions of invoices and bills in an organized manner. 
  • It helps in saving much time and effort that is consumed while reconciling and grouping payments of transactions on a monthly basis. The QB Undeposited funds feature will avoid many conflicts and confusion in your account. All you have to do is review the transactions at the end of every month. 

Grouped Payments

When you group your payments, it will become much easier to track your transactions using the Undeposited Funds in QuickBooks. 

Let’s make it simple with the help of an example, suppose you have three different invoices that will be paid at once from the same customer. Now, your ‘Actual’ bank recognized those three payments that you have made as a Single Deposit. And now when you record these transactions in your QuickBooks accounts, you are required to combine them to deposit it in your QuickBooks checking account. That is when the Undeposited Funds in QuickBooks are used. This feature will help in reconciling your payments and Group Deposits in your QuickBooks account.

In simpler words, when you deposit three separate cheques of $100 that has been invoiced from the same customer, the QB Undeposited Funds will combine these three different cheques and show the entry of $300 under the name of that customer. This will avoid the unnecessary hassle to record multiple transactions and time-consumption of business hours.

How To Start Using the QuickBooks Undeposited Funds account?

Below are the steps that will help you to start using the undeposited funds in QuickBooks Online:

  • The undeposited account in your QuickBooks will be set to the default ‘Deposit To’ account. It is for the first payment that you will receive or enter the receipt of sales.
  • Once the first payment has been invoiced to your undeposited fund’s accounts, you are required to click on the select the ‘Global Create Button’.
  • After that, choose the ‘Receive Payment’ option.
  • Here, the Undeposited fund’s account is pre-selected.
  • From the drop-down menu, choose the customers.
  • After that, select the payment method.
  • Check the amount received.
  • The user can change the location of where he/ she wants the money from the ‘Deposit To’ account but before making a bank deposit.
  • After you receive payment in your QB Undeposited fund account, you are required to deposit the money into your bank whenever you want.
  • After that, close all the invoices.

Also Read: Steps to Write off an Invoice in QuickBooks

Reviewing your QuickBooks Undeposited Funds Account

The following are the steps that help in reviewing your undeposited fund’s account:

  • Go to the ‘Lists’ menu.
  • Choose the ‘Charts of Accounts’ option.
  • After that, right-click on the ‘Undeposited Funds’ option.
  • Now, choose the ‘QuickReports: Undeposited Funds’ option.
  • In the drop-down menu of Dates, choose the ‘All’ option.
  • Click on the ‘Customize Reports’ option.
  • Go to the ‘Filters’ tab. 
  • Scroll down the Filters tab.
  • Choose the ‘Cleared’ option.
  • From the cleared section, choose the ‘No’ option.
  • Click on the ‘Ok and Close’ option.

To Sum Up:

Hopefully, the above-given information is useful for you to get rid of this problem. But if you are still facing any issues with your software and need professional assistance, regarding accounting, bookkeeping & accounting software-related issues then feel free to get in touch with Certified Experts at +1-860-325-4922. The USA-based ProAdvisors will provide all sorts of assistance related to the software 24/7.

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