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ShariWhite
February 1, 2024
Question

Clearing Undeposited Funds Account when Deposits were Previously Recorded in QBO

  • February 1, 2024
  • 2 replies
  • 0 views

A few months ago, I recorded a number of deposits from QuickBooks Payments as deposits to my checking account and credited sales revenue.  I now see that many of them are listed in my Undeposited Funds Account.  I'm concerned that if I create deposits in QBO to clear the UF account, I will be duplicating items in my checking account register.  What can I do to clear out these UF account lines?

 

Thank you!

2 replies

Adrian_A
Adrian_A
February 2, 2024

Hi ShariWhite,

 

I'm here to help fix the issue you encountered.

 

When clearing Undeposited Funds (UF) account, you'll have to make a deposit. All payments in the UF account automatically appear in the Bank Deposit window. To do so, you can follow these steps:
 

  1. From the + New tab, select Bank deposit.
  2. From the Account dropdown, choose the account you want to put the money into.
  3. Select the checkbox for each transaction you want to combine.
  4. Make sure the total of the selected transactions matches your deposit slip. 
  5. Select Save and close or Save and new.

 

Afterward, let's review your Undeposited Funds account. Here's how:

 

  1. From the Transactions tab, select Chart of accounts.
  2. Locate the Undeposited Funds account.
  3. Click View register.

 

I'm always around whenever you have concerns about managing bank transactions.

Rainflurry
Rainflurry
February 2, 2024

@ShariWhite 

 

How did the duplicate amounts end up in Undeposited Funds (UF)?  Did you manually enter the deposits to sales and then the duplicates UF entries came in through bank feeds?  If you're sure these are duplicate deposits, then you need to figure out which one to delete because, if you see them both in UF and your bank account register, they are already duplicated.  If the entries to UF were invoice payments received and brought in through bank feeds, then I would delete the deposits posted to sales revenue in the checking account because you want the payments received to close out the invoices.  If neither of the entries to UF or the checking account are payments received on invoices, you can delete the UF entries.      

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ShariWhiteAuthor
February 7, 2024

Thank you.  This was very helpful!  Now, I have made things worse because I didn't think they were tied to invoices, and I deleted the UF entries.  Then I discovered that they WERE tied to invoices, and I have this A/R hanging out there.  Is there a way to delete or write-off the invoices so my A/R goes away for each of these customers?  Even though I am an experienced accountant, I can see that I needed some QB specific lessons before I set up this business.  Your help is greatly appreciated! 

Rainflurry
Rainflurry
February 8, 2024

@ShariWhite 

 

"Is there a way to delete or write-off the invoices so my A/R goes away for each of these customers?"

 

Just to confirm, you have duplicated the income - once when you recorded the deposits as Sales Revenue and again when you created the invoices.  Am I understanding that correctly?

 

If so, then you have a couple options: if you're on cash basis, you can zero out the invoices since cash basis taxpayers don't have A/R and zeroing out the invoices should not impact previous periods reports on cash basis.  Or, create credit memos with a service product linked to Sales Revenue and apply that to that to the invoices.  The credit memos will close A/R and cancel out the duplicate income from the invoices.  Or, create journal entries: debit Sales Revenue, credit A/R for each customer's deposit.  You should use credit memos or journal entries if you're on accrual basis.  In the case of credit memos and journal entries, don't forget to apply the A/R credit to the invoices.   

 

  

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