Undeposited Funds in QuickBooks

This is an area where users struggle -- undeposited fund account.  What is it?  Why does it have a balance?  Why do my transactions in my bank reconciliation screen not match my books?  Think of this account as your desk drawer.  You get your mail.  People pay you for your work that you have invoiced.  You receive your payment, clear the invoice, put the check in the drawer (undeposited funds acct.).  On the last day of your work week, you take all of your checks, grab a deposit slip, tally up the deposit and take it to the bank.  In QuickBooks Online (QBO), you would click the + Bank deposit and group them just as you did on the paper deposit slip and show in your bank register in the program the total deposit.  It will match the bank's records.  You will receive the bank feed and match the deposit you created to the bank feed match.  It is that easy.  

Lynda Artesani

Lynda Artesani is the president of Artesani Bookkeeping where she uses her expertise and organizational skills to help her clients thrive and become profitable. Lynda is a member of the Intuit Trainer Writer Network. She is an alumni member of the Intuit Advisory Board. Additionally, she is the first Expert Columnist for the QB Community forum. She is also a co-founder in a Facebook group called QB Community Live!