What is the Undeposited Funds Account?
When you receive cheque payments on a particular day, instead of doing receive payment in QuickBooks directly to a bank account for each individual cheque, you receive the payments to the Undeposited Funds account.
When you go to Make A Deposit, you check off all the payments that you are putting on the bank deposit slip.
When you go to the bank and deposit several cheques, the bank will give you a receipt for the total deposit. This is the total that will show up on your bank statement and will match when you reconcile.
If you don’t group the cheques together as one deposit, you will need to manually add up the cheques from the register to match what is on your bank statement when you reconcile the account.
If you want to make all deposits go to the Undeposited Funds account, you need to enable this preference. No account will show up on the Receive Payment screen this way.
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1.Click on Edit, Preferences menu.
2. On the left side select Payments.
3. Click on the tab Company Preferences.
4. Select the “Use Undeposited Funds as a default deposit to account”.
5. Click OK.
6. Receive payments like you normally do. You will notice that there is no field that says Deposit To.
7. Once you have completed receiving payments, click on Banking from menu bar and Make Deposits (or Deposit icon on icon bar). Select payments to deposit and click OK.
8. You are now at the Make Deposit window.
9. Make sure your deposit date and bank account are correct.
10. Notice From Account – Undeposited Funds.
11. Click on Save & Close to deposit.
If you would like to have the option to select either a bank account or the Undeposited Funds account at time of receiving payment, you must leave all payment options unselected.
Click on the down arrow to right of Deposit To – select which account you want to deposit to.