How to Clear Out Undeposited Funds in Quickbooks
Undeposited Funds is a default account in Quickbooks where you can temporarily hold customer payments until you are ready to deposit them into your bank account. It is a useful feature that allows you to keep track of payments received, especially if you receive multiple payments from different customers in a day. However, it is important to regularly clear out Undeposited Funds to ensure accurate financial records. In this article, we will guide you through the process of clearing out Undeposited Funds in Quickbooks and address some common questions related to this topic.
Before we move on to the steps, make sure you have properly recorded the customer payments in Quickbooks. To do this, go to the “Receive Payments” screen and select the customer who made the payment. Enter the necessary details, such as the payment method, amount, and date. Once you have recorded all the payments, you can proceed with clearing out Undeposited Funds.
Here are the steps to clear out Undeposited Funds in Quickbooks:
1. Open Quickbooks and go to the “Banking” menu.
2. Select “Make Deposits” from the drop-down menu.
3. In the “Payments to Deposit” window, you will see a list of customer payments that are still in Undeposited Funds.
4. Select the payments that you want to include in the deposit by checking the boxes next to them.
5. Click on the “OK” button to proceed.
6. In the “Make Deposits” window, enter the necessary details, such as the date and deposit to account.
7. If you have multiple payments, you can group them together by selecting the “Group with other undeposited funds” checkbox.
8. Review the deposit details and make any necessary changes.
9. Once you are satisfied with the deposit, click on the “Save & Close” button.
10. Quickbooks will now move the selected payments from Undeposited Funds to the designated bank account.
11. To verify the deposit, you can go to the “Banking” menu and select “Use Register” for the bank account you deposited the funds into.
12. In the register, you should see the deposit listed as a credit.
Now that you know how to clear out Undeposited Funds in Quickbooks, let’s address some common questions related to this topic:
1. Why should I clear out Undeposited Funds?
Clearing out Undeposited Funds ensures accurate financial records by reflecting the actual deposits made into your bank account.
2. Can I select multiple payments to include in a single deposit?
Yes, you can select multiple payments and group them together in a single deposit.
3. Can I undo a deposit made from Undeposited Funds?
Yes, you can undo a deposit by going to the “Banking” menu, selecting “Make Deposits,” and deleting the deposit.
4. What happens if I accidentally delete a deposit?
If you accidentally delete a deposit, you will need to recreate it by following the steps mentioned earlier.
5. Can I transfer funds directly from Undeposited Funds to another account?
No, you cannot transfer funds directly from Undeposited Funds to another account. You need to clear out Undeposited Funds by making a deposit and then transfer the funds if needed.
6. How often should I clear out Undeposited Funds?
It is recommended to clear out Undeposited Funds at least once a week or whenever you make a deposit.
7. Can I see the history of cleared out Undeposited Funds?
Yes, you can see the history of cleared out Undeposited Funds in the register of the bank account where the funds were deposited.
8. What if I accidentally select the wrong payment to include in a deposit?
If you accidentally select the wrong payment, you can uncheck the checkbox next to it before saving the deposit.
9. Can I clear out Undeposited Funds for multiple bank accounts simultaneously?
No, you need to clear out Undeposited Funds for each bank account separately.
10. What if I receive a payment that doesn’t belong to any customer?
In such cases, you can create a new customer called “Miscellaneous” or “Unknown” and assign the payment to that customer.
11. Can I clear out Undeposited Funds for payments received through credit cards or other payment processors?
Yes, you can clear out Undeposited Funds for all types of payments, including those received through credit cards or other payment processors.
By following the steps provided and understanding the answers to these common questions, you can efficiently clear out Undeposited Funds in Quickbooks and maintain accurate financial records for your business.