How to Use Undeposited Funds in QuickBooks Online
QuickBooks Online is a popular accounting software that helps businesses manage their finances efficiently. One of the features it offers is the ability to track and manage undeposited funds. Undeposited funds are payments received from customers that haven’t been deposited into your bank account yet. This article will guide you on how to use undeposited funds in QuickBooks Online and answer some common questions related to this feature.
Using Undeposited Funds in QuickBooks Online:
1. Enable the Undeposited Funds account: To start using undeposited funds, go to the Chart of Accounts in QuickBooks Online and make sure the Undeposited Funds account is enabled. If it’s not, you can create a new account and name it “Undeposited Funds.”
2. Receive payments: When you receive a payment from a customer, go to the Sales menu and select “Receive Payment.” Enter the necessary details such as the customer name, payment amount, and payment method. In the Deposit to field, select the Undeposited Funds account.
3. Review undeposited payments: To review all undeposited payments, go to the Sales menu and select “Undeposited Funds.” This will show you a list of all payments that are waiting to be deposited.
4. Make a deposit: Once you’re ready to deposit the funds into your bank account, go to the Banking menu and select “Make a Deposit.” Choose the payments you want to deposit from the list of undeposited funds. Enter the necessary details such as the deposit date and the account you want to deposit into. Save the deposit.
5. Match the deposit: If you have already recorded the deposit in your bank account, you can match it with the deposit you made in QuickBooks Online. This will ensure accurate reconciliation of your bank accounts.
Common Questions and Answers:
1. What is the purpose of undeposited funds in QuickBooks Online?
Undeposited funds provide a way to track payments received from customers that haven’t been deposited into your bank account. It helps keep your books organized and makes it easier to reconcile your bank accounts.
2. Can I skip the undeposited funds step and directly deposit the payments into my bank account?
While it’s possible to skip the undeposited funds step, it is not recommended. Using undeposited funds ensures that you accurately record your payments and provides a clear audit trail.
3. How do I know which payments are included in a particular deposit?
QuickBooks Online allows you to view the details of each deposit. Go to the Banking menu, select “Deposits,” and choose the specific deposit you want to review.
4. Can I split a payment and deposit it into different bank accounts?
Yes, you can split a payment and deposit it into different bank accounts. When making a deposit, select the option to “Split” and allocate the payment amount to the desired bank accounts.
5. Can I change the payment method for undeposited funds?
Yes, you can change the payment method for undeposited funds. Simply edit the payment and update the payment method.
6. How do I handle bounced or NSF checks with undeposited funds?
If a check bounces or is returned due to insufficient funds (NSF), you can adjust the payment in QuickBooks Online. Edit the payment and change the amount to reflect the bounced or NSF check.
7. Can I delete undeposited funds transactions?
Yes, you can delete undeposited funds transactions if they were entered incorrectly or are no longer needed. However, it’s recommended to consult with your accountant before deleting any transactions.
8. Can I merge duplicate undeposited funds transactions?
No, you cannot merge duplicate undeposited funds transactions. You will need to delete one of the duplicate transactions and ensure the correct information is entered in the remaining transaction.
9. How do I handle customer refunds with undeposited funds?
When issuing a customer refund, you can use undeposited funds to record the refund payment. This ensures that the refund is properly tracked and can be matched with the corresponding bank transaction.
10. Can I use undeposited funds for cash payments received?
Yes, you can use undeposited funds for cash payments received. When recording the payment in QuickBooks Online, select “Cash” as the payment method and choose the Undeposited Funds account.
11. How often should I deposit undeposited funds into my bank account?
It’s recommended to deposit undeposited funds into your bank account regularly, ideally on a daily or weekly basis. This helps maintain accurate cash flow records and reduces the risk of misplacing or losing payments.
In conclusion, using undeposited funds in QuickBooks Online is a valuable feature that helps businesses manage their payments efficiently. By following the steps outlined in this article and understanding the common questions and answers, you can effectively track and manage your undeposited funds, ensuring accurate financial records for your business.