Accounting & Bookkeeping

Reconciling Undeposited funds in Quickbooks

undeposited-funds Quickbooks

we maintain the accuracy of paymentsReconciling Undeposited funds in Quickbooks

  • When the payment is processed in Quickbooks via Check receipt or Credit Card Payment, it is recorded to an Undeposited funds account.
  • When subsequently payment is received in bank feeds, we need to check each individual deposit and enter a whole amount of receipt into the bank.
  • This would ensure that the Undeposited fund’s account is made Nil and Bank register is Debited with the same amount.
  • The transactions that remain in undeposited funds need to be analyzed for accuracy.
  • Steps for recording transaction via Undeposited funds:

a. Enter a transaction of receive payment

Reconciling Undeposited funds in Quickbooks

Reconciling Undeposited funds in Quickbooks

b. Match the multiple transactions or receive payments with deposit:

c. Reconcile this transaction in the bank account.


Reconciliation of undeposited funds Accounts

Reconciliation of undeposited funds Infographics

What is an undeposited fund account in Quickbooks?

First, we need to understand which funds are recorded as undeposited funds in the Quickbooks, it’s simple when you the first time receive a payment, and Quickbooks create an undeposited fund account that becomes a default deposit to account for some kind of payment in the future. Suppose after receiving payment invoice, sales or credit card receipt, Quickbooks automatically generates the undeposited fund account.

Need to check deposits

When you are receiving subsequent payments than you take individual payment option to your financial institution like a bank, you can transfer the undeposited fund account by going to the “Make deposits window.” After getting the payment we can see that in bank feeds and that creates the need to check each of the individual deposits and enter the whole amount of receipt into the bank.

By doing this, you can ensure that all the transactions made in the undeposited account are made nil and the bank account is also debited with the same amount. And the remained fund in the undeposited accounts also needs to be verified for accuracy.

How to record transaction via an undeposited fund account?

Recording transactions using an undeposited fund account is simple. These are the basic steps that need to be followed.

  1.   Enter a transaction of received payment:

There would be different payment transactions deposited into the undeposited account. Select the one payment transaction you want to record.

  1.   Match the multiple transactions of receiving payments with deposit:

There would be subsequent payment transactions with the one you record, match all those transactions so you can add them all in one go. Groping those transactions would definitely make the process easy and rapid for you.

Following this, you can also match your bank activities. You can select all the transactions you want to deposit and select an appropriate bank account.

  1. Importance of Reconciling this transaction in the bank account:

After following all these steps, you can see that undeposited fund accounts have become $0.00. That will also make the bank account deposited with the same amount. You can then cross-check both the accounts. Therefore, it’s important to reconcile bank accounts with Quickbooks.

It’s very important as it shows the inflow-outflow of payments. It is necessary to complete this process with proper articulation to ensure that we maintain the accuracy of payments. It also helps to have a glance at your business payment transactions at any time.

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