When you receive payments from customers, you can either deposit each
payment directly into a QuickBooks bank account or you can group payments
together to be moved to that account later. You can also
choose the method you prefer for depositing payments.
How do I choose a deposit method?
When you are deciding on the method to use to deposit payments, think about
how your bank statements show deposits. Select the deposit method in QuickBooks
that imitates your bank statements to make it easier for you to reconcile your
You choose a deposit method at the time you receive the payment, either in
the Receive Payments window or in the Enter Sales Receipts window.
If you choose to deposit to a specific bank account from the Deposit To
drop-down list, QuickBooks deposits the payment in the account you selected.
You do not need to make a separate deposit; QuickBooks automatically records a
deposit for you on the date you received the payment.
Note: If you have selected Undeposited Funds as the default Deposit
To account in Sales & Customers Preferences (Company Preferences tab), the
Deposit To drop-down list will not be displayed.
If you choose to group payments with other undeposited funds, QuickBooks
holds the payment in an other current asset account called Undeposited Funds
until you make a deposit.
Note: You can also choose a deposit method when you set up payment
items for recording partial payments on invoices.
When to use undeposited funds
Use undeposited funds:
If the bank statement shows a lump sum for a deposit, group payments with
other funds for later deposit.
If the bank statement shows each individual payment that was deposited,
deposit directly to an account.
How do I set undeposited funds as the default account?
This preference causes QuickBooks to set Undeposited Funds as the default
account for depositing payments.
When this preference is off, QuickBooks displays the Deposit To field on the
Receive Payments and Enter Sales Receipt windows. You must click a destination
account from the drop-down list.
Where to find this preference:
Open the payments preferences.
How do I deposit payments in Undeposited Funds?
If your payments are held in the Undeposited Funds account, you must
record a deposit to transfer the money from the
Undeposited Funds account to your QuickBooks bank account. For example, you
might decide to deposit payments at the end of each day or week.
Depositing money from a refund (not
Setting up payment items
Using payment items on
Depositing credit card payments (Merchant Service)