An undeposited funds account in QuickBooks, is by default, is a place where all the payments of an organization are kept until they are transferred to a bank account.
In layman terms, an undeposited funds account is more like a safe, where you store your money until they are fit to be kept in the bank.
Why do you need to set up undeposited funds in QuickBooks?
With the help of undeposited funds, you can track your customer payments.
Read More: How to Set up Undeposited Funds in QuickBooks Online?
Undeposited funds are no less than a default depositor of your business account. Whenever a payment is received from invoices, a payment item is used on an invoice, or a sales receipt is entered, undeposited funds are used.
It typically works in sync with receive payments along with bank deposit features, to finish the invoicing process.
Furthermore, when you receive more than one customer payment in a day, only with the help of undeposited funds in QuickBooks can you manage the money into your business.
If too many cheques are taken to your bank account to deposit them as a single deposit in a day, it is quite likely banks will not register individual cheques as individual deposits.
How to set up Undeposited Funds in QuickBooks?
Prior to recording your funds, please make sure that all the transactions are entered into QuickBooks.
Ensure that your records entered in the bank are in sync with QuickBooks. For instance, if your bank registers a group of funds as a single payment, ensure that it is the same in QuickBooks.
Here are the steps to set up undeposited funds in QuickBooks:
Step 1: In your QuickBooks account, select the plus icon visible at the top, and then choose the receive payments option.
Step 2: Enter the customer information along with the date when the payment was done.
Step 3: Select the payment method.
Step 4: Add the cheque number where it is mentioned reference number
Step 5: Select the Deposit button and click on undeposited funds available in the dropdown menu
Step 6: Select Save and click Close.
On following the above steps ardently, your business payments will be recorded as undeposited funds in QuickBooks, successfully.
What is the reason for incorrect Undeposited Funds balances?
Registering missing deposits in the bank account directly, unaware they are recorded in undeposited funds is one of the primary reasons for this issue.
To avoid this, check whether undeposited funds are set up as default deposit to your account or not.
Any kind of mismatch in undeposited fund balances will lead to wrong financial discretion and mismanagement in business decisions.
For those who understand the importance of setting up undeposited funds in QuickBooks and its business benefits, a professional help is all you need to get it going.
If you are confident enough and think just a little bit of guidance will help you in setting up un-deposited funds in QuickBooks (lear or turnoff deposit payments into the Undeposited Fund in QuickBooks Desktop), feel free to connect with us at LIVE CHAT anytime.