In my recent Facebook Page post I mentioned some problems that you might run into with Quickbooks and I told you how to fix them but now I am going to go a little bit more in depth as to how to fix them. I am going to do both Quickbooks Online and Quickbooks Desktop.
Basically the purpose of the undeposited funds account is a place to hold your money until you get the funds to your bank for a deposit. Think of it as a wallet, when you worked for the corporate world, you would get a paycheck and then you would put it in your wallet until you got to the bank that evening and deposited it, same concept.
***When your undeposited funds account is overstated then your income is also overstated so if you have deposits that are from prior years that you closed out, you may have overstated your income for tax purposes. Contact your CPA to see if you will need to refile your taxes.
- Click on banking
- Click make deposits
- Select the payments that are already entered into your check register
- Click the next available line under from account column
- Select the income account that the money is coming from (IE Sales income, etc)
- Find the total deposit amount at the bottom of the deposit screen
- Add that amount as a negative on the available line. (IE if the deposit amount is $500 you will need to enter it -$500
- That will change your deposit amount to a zero
- Click save
- Click the plus
- Click bank deposit
- Select all payments that are still in the undeposited funds account
- Then under add new deposits Select the income account that was used
- For the amount make it a negative of the total deposit
- Click save
There you have it. How to fix your overstated undeposited funds account which is a common error.
Still have other problems with your QuickBooks desktop or QuickBooks online account, feel free to contact us so that we can take a look and get you on the fast track to proper, accurate bookkeeping.