Quickbooks Undeposited Funds

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Using QuickBooks undeposited funds can be very useful when it comes to using Quickbooks. Think of undeposited funds the same as an "escrow". Escrow is a place where money gets held as a holding pattern until it is ready to be released.

Quickbooks Undeposited Funds

Undeposited Funds Quickbooks

Would be used to record a payment received in a holding pattern until verifying that it actually hits the banks. This is typically used when accepting credit card payments, or receiving checks before actually depositing them. The process is another form of reconciliation. You record the transaction in Quickbooks to make sure it’s noted. Then once you see it hitting the bank, an entry is made to move it out of undeposited funds to a bank of your choice.

Below are the steps made in the video tutorial:


Customer / Receive Payments
Select Customer, Amount, Date of check, etc.
DO NOT APPLY the payment.  Leave it as a credit on the customers accounts as the video stated.
The payments should be posted to A/C "Undeposted Funds" NOT the directly to the bank account.

Once you are done posting all your payments and are ready to make a deposit,
Banking / Make Deposit
The available checks to deposit will pop up, if not click on the Payments button.
Select the checks you will be depositing
Save and Close

So now you can reconcile your bank account, have accurate customer balances, etc.

When you close the job and invoice the customer you can apply the "PrePayment" to clear the customers balance in 2 ways:

1.
Create Invoice
There will be a button at the bottom to the left of the Payments Applied/Balance Due section.  "APPLY CREDITS"
Click on this and the initial PrePayment will show in the next window.  Select this and it will apply it to the customers balance.
DONE

2.
Receive Payments
Select Customer
Leave the amount as $0
Click on the Invoice you are reducing the balance on
Click on the button "Discounts & Credits"
Select the "PrePayment" on the account and make sure the Check amount and Payment amount is $0.
Save and Close
DONE

There is no check to deposit at this point.

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