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jackjackson1977
February 22, 2025
Question

Problem with income accounts in Chart of accounts

  • February 22, 2025
  • 1 reply
  • 0 views

I have not got my Chart of accounts setup correctly I think. In my Charts of accounts I set up three income accounts for the three different types of work we do. Landscape & Irrigation & Nursery. But the deposits into Accounts Receivable or undeposited account. Program will not let me change them. HELP

    1 reply

    FishingForAnswers
    FishingForAnswers
    February 22, 2025

    @jackjackson1977  When income shows up in accounts receivable, it is recognizing that you are owed money that you have not received yet. An example of this would be an unpaid invoice.

     

    When income shows up in Undeposited Funds, it is recognizing that you have received payment but have not put it into any particular bank or asset account.

     

    I'm not particularly familiar with QBO, but I can't imagine they'd embed the settings for your default deposit account in the chart of accounts. You should be able to change said default deposit account under whatever QBO's equivalent to Preferences or Settings is.

    R
    Rea_M
    February 22, 2025

    Hello, jackjackson1977! I hope you're doing well. Ensuring your income transactions are accurately categorized is vital for tracking your business's progress. I'm here to assist you in understanding the functions of the Accounts Receivable and Undeposited Funds accounts in QuickBooks Online (QBO). We'll also explore the options for modifying these accounts to better suit your business needs.

     

    By default, QuickBooks uses the Undeposited Funds account to hold customer payments until you deposit them at your real-life bank. However, modifying the Deposit To section when recording invoice payments or creating sales receipts will deposit them directly to the appropriate income account. Please see the screenshots below for your reference.

     

     

    On the other hand, the Accounts Receivable (A/R) is an account that the system automatically adds to your Chart of Accounts after creating your first invoice. It's used to track the money your customers or clients owe you. Although you can set up multiple A/R accounts, QuickBooks will only use the default receivable account when tracking sales transactions.

     

    But if you're referring to the income account used for your products and service items, you'll have to revise the Income account directly in their profile. Follow these steps to complete the procedure:

     

    1. Go to the Sales menu and select Products & services.
    2. Locate the item you'd like to change the account for and click Edit under the Action column.
    3. In the Sales section, customize the Income account.
    4. Choose Save when you're finished. 

     

    Additionally, would you like to see your best-selling products, get insights on the things you buy and sell, and your cost of goods? You can get all this information by generating sales reports in QBO.

     

    Moreover, have you heard about our QuickBooks Live Expert Assisted team? They're great at making it easier to manage your revenues and finances. I highly recommend looking into their services; their support could greatly help you with your accounting!

     

    With these details in hand, you’re now well-equipped to manage your income accounts and entries in QBO. If there are any additional questions or you need further clarification about the process, please don’t hesitate to click the Reply button. I’m always here to help. Take care, jackjackson1977, and I hope you have a fantastic day ahead!

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