Last Updated on October 3, 2020 by Editorial Staff
Hey, here we are with a new topic, ‘QuickBooks Undeposited Funds’. Are you interested to get knowledge regarding this topic? Then, stay connected with us and read the blog carefully.
Save Time & Effort
Get help from expert
Most of QuickBooks user doesn’t know about QuickBooks undeposited funds. So we tried to explain it to you. Suppose you are a business owner and selling goods to your client. And your client has paid the amount of those goods. So what will you do first, we sure you will keep a note in your business diary. And later you deposit that amount in the bank. Similarly, QuickBooks use to create undeposited funds in QuickBooks when any client paid to the vendor. This will help QuickBooks user to recheck your bank passbook and QuickBooks undeposited account for reconciliation.
Why Should you Use QuickBooks Undeposited Funds
If you want to manage your business accounting accurately. Then you have to use QuickBooks undeposited funds. Because it’s just like a personal locker for keeping safe your payments until you are not ready to submit this payment into bank.
As we discussed earlier this account creates the QuickBooks. And generally, it’s a current asset account for your organization. Generally when we sell something then we make invoices in order to receive payments.
But when we receive payment through the checks. Then if we try to maintain its accounting in QuickBooks. Then we need to have QuickBooks online payment service activated. But if you are not the user of QuickBooks online payment service then you have to use credit card payment through ACH. But we know that it is not possible to take payment through a credit card for everyone. So some clients give payment through checks.
Hence we generate invoices in QuickBooks that use for future reference. This is called QuickBooks undeposited funds. Because we made invoices but we didn’t deposit that checks in the bank. So we how now you will understand why we should use the undeposited funds in QuickBooks.
How To Use QuickBooks Undeposited Funds
For understanding the QuickBooks undeposited funds process. We have to take an example. So that we can understand well. Suppose you are a business owner and received payment from Albert $5000 through check. Then how we can do entry in undeposited funds. Let’s see the below steps.
- First, go to the QuickBooks dashboard and click on receipt.
- Next window will open for Customer Payment
- Select the company name from which you have received the payment.
- Fill the amount you have received
- Just right of the payment amount you will see cash, check and credit card option
- Click on the check because we received the payment through check
- Then select the date of receiving and fill check number
- After that you will see Deposite To dropdown list, you have to select checking
- And then save and close the window
- Now if you want to check then select Check
- You can see the checks lists where you check deposits directly goes under the account receivable account.
So these steps are just only for the one check payment receivable. But if you have multiple checks that have to be paid into the bank but not yet done then how you can do this entry in QuickBooks undeposited funds.
How to Do Multiple Undeposited Funds in QuickBooks
As a business owner or accountant has lots of work to do. Hence when they have multiple payments through the checks. Then how will you do entry in QuickBooks? So basically when you create invoices and do then received payment entry in receive payment or else Create sales Receipt. And when this entry goes for Record List then Record use as undeposited funds. So let’s see how to do that…
- First, if you want to understand well then go to the Edit menu.
- And select Payment then go to Company Preferences
- Under the company, preferences uncheck the undeposited funds and click OK button
- And close the window
Then you can follow the below steps
- Now go to the Received Payment
- Then select customer under the Received From the drop-down list
- Give check amount and other details
- Then select Undeposited Funds from the Deposited To drop-down list
- Below the Deposited To dropdown list you will see various unpaid checks.
- Select each of them and click on save and close the window
- Now if you see in the Record Deposite then you will see the Undeposited Funds screen on your dashboard.
- Where you will see the previous checks that we selected. So again select them and click OK
Now you will see the window for original payment entry. You can feel here the name of the bank and other details. So that you can provide when the original payment is done by you then it will go in right account category.
And when you will see in the Reconcile option. You will get all the checks which we selected. We can see the total amount of those payments received. So that’s it enjoy your QuickBooks
QuickBooks undeposited funds are very helpful for reconciling your bank account. So use these undeposited funds account so that you can never be done any mistakes. We tried our best to put information in this blog, we hope, you like it, and now you are able to perform all the procedures. Further if in case, you need any kind of help then, you can get our ProAdvisor support through the toll-free number +1-888-461-1179 .