Using an Undeposited Funds Account

Last Updated: Jan 08, 2015 08:38PM PST

Learn how to deal with batch deposits by using an undeposited funds account.

What is a Batch Deposit?

A batch deposit occurs when you put together payments from multiple customers in a single deposit. This can happen when you deposit checks from different customers at the same time into your bank account, or have multiple credit or debit card payments from a merchant account transferred as a single deposit into your bank account. Using an Undeposited Funds account ensures that your deposit amounts in the Banking page match those shown on your bank statement.

Don't have an Undeposited Funds Account?

The Undeposited Funds account is included in your chart of accounts by default. If you removed it, please add it back by going to the Accounts page.

Then creating a new account with the Name of Undeposited Funds, and a Type of Cash (you can add a Description if you like, but it's not necessary).

Using the Undeposited Funds Account

Use Undeposited Funds as the Payment Account

Go to the Enter Payment tab found in the Income page.

When you receive the payment from your customer, enter it like any other payment, but use the Undeposited Funds account for the Payment Account.

Every time you receive a payment that you will deposit into your bank along with other payments, record the payment to the undeposited accounts.

Make a Transfer from Undeposited Funds to the Bank Account

Let's say that you went to the bank and deposited three checks totalling $4,000 into your bank account.

  1. Check #234 - $500
  2. Check #8837 - $1,000
  3. Check #2032 - $2,500

To record this, go to the Transfers page.

Then make a $4,000 transfer where the Withdraw From account is Undeposited Funds and the Deposit Into account is your Bank Account. If you like, you can add a Memo referencing the checks deposited, which makes it easier to track payments and deposits.

Now when you go to the Banking page and reconcile your bank account, instead of having three checks show up as separate line items, it'll show up as a single deposit of $4,000, making it easy to reconcile.

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