Solved: Matching undeposited fund payments to downloaded transactions

Angela – We don’t get a lot of questions about QB Online Edition, so it’s not something we focus on. I don’t believe there is a setting in the online edition to set this as a preference as exists in the desktop products. However, many data entry screens have the ability to save the selections as default. This is a common timing problem in QB whenever you grab online banking transactions before you record A/R payments. Ideally, you should record A/R payments first, turn them into deposits, and then grab online deposits.

The credit account of your journal entry is where you offset the negative balance. You can check the accounts you use in your journal entry to verify. Basically, this is money that your company has received from customers but has not yet deposited into your bank account. When you use the Make Deposits form, the Undeposited Funds will be moved to your bank account. I would imagine that even those users still learning QuickBooks understand the basics of invoicing.

I just discovered that several of my deposits did not record into my general bank account as deposits. Thank goodness I have all my deposits and was able to go back in and find the amounts to delete these deposits and then record them. If you’re using QuickBooks Payments, you can check in your account if the money paid from the customer is already deposited from there. This way, you can check the status of all your processed payments and, when we put them in your bank account and the totals. Then, the Merchant Service Center shows the deposit statusPendingif the bank didn’t clear the deposit yet. However, when Intuit receives information from your bank that the deposited funds have cleared, the status changes toFunded.

Start using the Undeposited Funds account

Tax time came along, and because of a bookkeeping error, the total revenue of the business was inflated by $850,000! Therefore, this simple error required the business to pay taxes on $850,000 of additional income that had never been received. No wonder they thought they were being taxed unreasonably. For some background context, we use QBO to manage the finances for our e-commerce company. A sale on our store creates a sales receipt with a deposit to undeposited funds. Shopify will remit aggregate funds to our bank once per week.

We once worked with a law office that was doing about $5 million in annual revenue, with a client set up on a retainer fee of $850,000. That $850,000 retainer was marked in the books both against the retainer and against undeposited funds. The result was that the undeposited funds made its way onto the balance sheet as a part of their cash assets.

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Credit card processing is one of those areas that challenges my phrase of “generally speaking” above. Ideally, you want your POS system to understand how your merchant account closes batches, so your merchant account and POS batches are in perfect sync. While that’s the ideal, it’s often hard to achieve, and unfortunately, some choose to just send detail sales receipt data to QB only for the purpose of recording deposits. You’ll have to closely examine how your POS and merchant accounts handle batches, and contact them both to see if they can sync perfectly.

truckers bookkeeping service receipts get transferred to Quickbooks Pro and all credit card payments for each day are placed in Undeposited Funds. The problem is that different cards take different amounts of time to “hit” my bank. So, if I do $5000 in sales on Monday, then on Wednesday, $3500 might get deposited and then on Thursday, the remaining $1500 will get deposited.

It is a temporary virtual space for holding the payment till the time you do not have the deposit slip. Once you have your deposit slip then you can make a bank deposit in QuickBooks to match the undeposited funds. Since both transactions were dated on Jan. 29, the first thing to check for is a deposit in your Bank Register for $2,062.52 dated on or around Jan. 29. It’s possible the deposit was posted straight to an Income account rather than matched to payments received. Also check for two separate deposits for $1,675.52 and $387, respectively. First, reconcile your bank accounts to make sure you have recorded all the deposits you have made.

All payments in the Undeposited Funds account automatically appear in the Bank Deposit window. Undeposited funds are like a big bag of money or cash drawer that you would keep your checks and cash payments in until you deposit them at the bank. You have already received the money, but it hasn’t been deposited in your account yet. You’re holding it until you make your weekly bank trip. This is the best way to record payments that have not yet been taken to the bank.

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The problem comes when people do not realize that QuickBooks saved the sales receipt or invoice payment to Undeposited Funds. They don’t see the amount in their bank account in QuickBooks, so they enter another deposit directly into the bank account. Now the money received has been recorded twice – once to Undeposited Funds and again to the bank account. You have to affect another account besides cash when you enter a transaction. Most likely that other account is an income account. There are other very important reasons for understanding Undeposited Funds.

Managing Undeposited Cash Sales

Don’t limit your list of possible events to what you think is likely; include even the unlikely causes, because sometimes that’s where you end up. Then, investigate each of those possible events in turn. If you’ve completed those steps, there shouldn’t be any monies relating to those transactions in undeposited funds.

I know the date of the entry but I just cannot re-deposit . The most important issue is to correct so that the bank reconciliation will equal the balance sheet going forward. It was not noticed until months later unfortunately.

QuickBooks Online does not keep account information but you can edit your sign in to see which bank you’re connected to. I think where I went wrong was thinking the “Cash” accounts were just the Banking Accounts, but it’s actually Banking + Undeposited Funds + Petty Cash + etc. On the other hand, in your case, you may also leave the balance as it is if they don’t affect the Profit and Loss report. However, your accountant can reverse the A/R balances using the proper accounts. Locate and select the unapplied payment to open the Receive Payment window.

• I just discovered that several of my deposits did not record into my general bank account as deposits.
• If your QB bank account balance is too low, you’ve missed some cash receipts, so your GJE would be a debit to the bank account and a credit to a sales account.
• For credit cards, choose the payments by credit card that make up a deposit.
• If you don’t and instead rely on online banking to enter transactions, you’ll end up re-doing them to make your accounting records accurate.

This is especially true for your transaction volume. It might be acceptable as a short term fix, but it’s not a good long term approach. Also, if I do receive directly in QB the payment, then I can see it in the drop down list for deposits. The Undeposited funds account is increasing, so the payments are coming through from Bill.com to QB. First, you don’t need separate sub-accounts to track the receipts from each customer.

If you are reconciling a bank account, and your QB balance is $895 below your bank balance as of that date, that suggests a deposit was made at the bank but not recorded in QB. That in turn would cause you to look at the undeposited funds account. Start with the GL account that’s off and the direction it’s off and ask yourself what events would cause that type of discrepancy.

When you make a bank deposit, your bank account is debited and undeposited funds is credited on the date of the deposit. As a general rule, you want to have your invoicing and payment processes under the same roof. If you use a service that handles invoicing and credit memos outside of QB, the best approach is to record customer payments there. Then, you only transfer revenue and collections to QB; the other system maintains your A/R. When you deviate from that setup, you create the problem you described.

It is never income or expense, but money Not in the bank. You’ve taken possession of it, and are sitting on that fat envelop, for you to take to the teller at the end of the day, for example. Or, you are holding it until the banking download shows it is in Checking. Or, it is showing funds from CC sales waiting to be settled to Operation Checking, from the merchant account Provider. The Undeposited Funds account (with the negative balance -2,243.86) shows transactions that have been reconciled and some that have not been when looking at a quick report. Getting rid of them depends on how they were entered.

From your question, it sounds like you’ve missed step #1. Overall this process works well, however, when I was trying to tie the balance sheet and statement of cash flows together, there is no adjustment for undeposited funds. It’s not an actual bank accounts which is why there’s no option to reconcile it in Total Office Manager. What you should do instead after saving your sales receipt or invoice payment is go to the Banking menu and create a deposit. QuickBooks will show you a list of the amounts waiting to be deposited. Simply check them off and indicate the bank account for the deposit.

• Choose all the Payments that you wish to Clean from the Particular Undeposited Fund Account and then Save the given Page.
• Fixing it depends on how these deposits were deposited.
• With an incorrect Undeposited Funds balance, chances are high that you are overstating your profit and paying too many taxes.
• However, the bank account you select on a transaction will come up the next time you create the same type of transaction.
• If it doesn’t show any revenue, then that’s likely the source of your problem.
• Reports – This section contains help topics for all reports.

Once done, you can check the Undeposited funds in the Chart of accounts to ensure that the payments have been cleared out. I recommend opening one of the payments and clicking on the blue hyperlink. If you see a blue date link next to the customer’s name, the payment is already linked to a bank deposit. Once you click on it, it will take you to the deposit. In today’s article, almost everything is required to share about undeposited funds in QuickBooks Online and in QuickBooks Desktop too. We have talked about the two main methods to clean up undeposited funds in QuickBooks Online.