This article addresses the concept of the Undeposited Funds account in QuickBooks.

Both QuickBooks Online and the Desktop versions utilize an Other Current Asset type of account called the Undeposited Funds Account.

This account is simply just a temporary holding account for payments received from customers (mainly check payments) until you have deposited these received payments into your bank account.

Typically, you only need to utilize this special account when you have more than one customer payment to deposit within one batch deposit. In other words, you will need to deposit multiple customer payments, AT THE SAME TIME, into your bank account and all of these payments will comprise only one whole (batched) deposit.

Example:

You have received a check payment each day for the past few days, but you haven’t had time to deposit all of these customer check payments into your bank account just yet, but you plan on doing this very soon.

To receive a customer payment in QuickBooks Online, you would simply do the following:

1. Find the customer in your list and click on “Receive Payment”.
2. Within the “Receive Payment” screen, fill in all of the fields and be sure to checkmark the invoice you want to apply payment to.
3. BEFORE you Save and Close, be sure the “Deposit To” field has the “Undeposited Funds” account selected.
4. Record and Close.
5. Do the same for each customer payment you received payments from this past week.
6. After you deposit all of these check payments into your bank account, there should only be one deposit to post in your bookkeeping.
7. So now, in your QuickBooks file, hover over the Create Icon in the upper left corner.
8. Now click on “Bank Deposit” under the “Other” menu.
9. Within this Undeposited Funds screen, you should see all of your recent customer check payments from this past week. Simply checkmark them all and be sure to now select the appropriate bank account and deposit date.
10. Save and Close.

Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.