How to correct undeposited funds?

For majority of my clients, I personally process (ACH) payments once a month.

I have processed a payment through online bookkeeping account and cleared the invoice.

A week later funds was transferred to my bank account as a batch (multiple invoice payments),  some invoices in my bookkeeping account reflected as "Deposited" as should be and some did not, It is showing as "Undeposited". How do I change Undeposit to Deposit. 

Note: I did receive the correct amount of payment per client, the total payment amount as a batch was deposited to the bank, I was able to reconcile the month in my QB. 

I have tried several methods mentioned here on your site to trouble shoot the situation. Unfortunately, I was not able to successfully make the proper changes.  Perhaps there is another method to resolve this issue? 

Mona

Thanks for joining the thread, @dca_1. I'd be glad to provide information and assist you with each of the details you need concerning undeposited funds in QuickBooks Online. 

As provided by my colleague above, the Undeposited Funds account holds everything before you record a deposit. We process and move transactions into your accounts automatically if you are using QB Payments.

Yes, you can also create a Journal entry and offset the value of a negative deposit. Here’s how: 

1. Select + New.
2. Under Other, select Journal Entry.
3. Enter the transaction date in the Journal date field.
4. On the first line, in the Account column, select the Undeposited Funds account.
5. In the Debit column, enter the single line deposit amount.
6. On the second line, in the Account column, select the bank account.
7. In the Credit column, re-enter the single line deposit amount (if it does not already appear).
8. Select Save and close.

From there, you can now offset the negative value. Let me guide you on how:

1. Select + New.
2. Under Other, select Bank Deposit.
3. Select the payment and the Journal Entry you created.
   The total should be zero.
4. Select Save and close.

However, I’d also suggest consulting your accountant. They can give you the best advice on handling these transactions. 

To avoid the issue from happening in your future transactions, you can choose the bank account in the Deposit to field if you don't want to use the Undeposited Funds account. This will directly affect your bank register. 

For more details about undeposited funds in QBO, check out this guide here: Deposit payments into the Undeposited Funds account in QuickBooks Online.

Moreover, feel free to visit these helpful resources that can help you along the way in managing payments and other transactions in QBO: 

• Record invoice payments in QuickBooks Online
• Unmatch downloaded bank transactions or move them to another account

If you have any other questions about managing your bank transactions in QBO, please feel free to leave a comment below. I'll get back here as soon as I can to help you again. Thanks for dropping by, wishing you a good one!

Hello there,

The Undeposited Funds (UF) account holds all funds before a deposit is recorded. To affect the bank, you need to make a bank deposit with the available funds. Here's how:

1. Go to the + New menu and choose Bank Deposit.
2. Click on the section that includes the payments for this deposit.
3. Enter the necessary information and save and close.

For detailed information, refer to this article: Record and make bank deposits in QuickBooks Online.

If the balance in your register is correct even without depositing the undeposited funds, you'll need to create a journal entry (JE) to balance out the Undeposited Funds. Follow these steps:

1. Select + New.
2. Under Other, choose Journal Entry.
3. Enter the transaction date in the Journal date field.
4. On the first line, in the Account column, select the Undeposited Funds account.
5. Enter the deposit amount in the Debit column.
6. On the second line, choose the bank account in the Account column.
7. Re-enter the deposit amount in the Credit column (if not already entered).
8. Select Save and Close.

For more details, refer to this article: Create journal entries in QuickBooks Online.

You may visit these links to guide you on how to categorize your transactions and reconcile your account flawlessly:

• Categorize and match online bank transactions in QuickBooks Online.
• Reconcile an account in QuickBooks Online.

The Community always welcomes you for further inquiries. Have a great day ahead!

Thanks for getting involved with this thread, earthly01.

To clear payments from your Undeposited Funds account, you'll want to create a deposit, then select each applicable payment to combine them into the transaction. The deposits should match what your bank statement shows.

Here's how to create a bank deposit:
 

1. In the left navigation bar, use your + New button.
2. Choose Bank deposit.
3. From the Account ▼ drop-down list, pick an account you want to put your funds into.
4. Tick the checkboxes for each payment you want to combine.
5. Confirm your total of selected transactions matches the bank deposit slip.
6. Select Save and close.

Since you're using a third party payment processor, the funds won't be redeposited into your account when you create a deposit in QuickBooks. The deposit into your real bank account should've occurred from your merchant service provider. The deposit you create will only serve as a record to show what occurred outside of your books.

I've also included a couple detailed resources about working with Undeposited Funds which may come in handy moving forward:
 

• Using Undeposited Funds
• Record & make bank deposits

Please don't hesitate to send a reply if there's any additional questions. Have a lovely day!