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About depositing payments

make deposit

enter deposit

undeposited funds

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 bank accounts.

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.

Edit > Preferences > Payments

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.

See also

KB ID# H_DEPOSIT_OV
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