What is Undeposited Funds?
What is Undeposited Funds?
Note: QuickBooks has renamed “Undeposited Funds” to Payments to Deposit on some accounts. They are the same account with the same functionality. If you cannot find it under either name, open your Chart of Accounts and look for the account whose Detail type says Undeposited Funds. That label stays the same even if the account itself has been renamed.
What is Undeposited Funds (or Payments to Deposit)?
Undeposited Funds is a temporary account where QuickBooks holds payments before you deposit them in the bank. Think of it as an envelope for cash and checks until you take them to the bank.
How does FlexBooks use Undeposited Funds?
This depends on your setup, and most customers are on the other one. Open your Chart of Accounts and look for an account called Credit Card Processor. If it is there, your card money goes to that account and not to Undeposited Funds, and the rest of this article is only about your cash and checks. See Clearing Accounts 101.
If you do not have that account, FlexBooks sends your card transactions to Undeposited Funds and then batches them into a single QuickBooks Deposit that moves the money to your checking account. See How Does FlexBooks Handle Credit Card Funds?
Why isn’t my Undeposited Funds balance zero?
The answer depends on the same question as above.
If you have a Credit Card Processor account, Undeposited Funds holds only your cash and checks. It should come back down to zero once everything you took to the bank has been recorded as a deposit. If the balance keeps growing, the usual reason is that cash or checks were banked and never recorded here. Record the deposit and the balance clears. See How do I handle my Cash Deposits? and How do I handle my Check Deposits?
If your card money goes to Undeposited Funds, the balance is rarely zero, and that is normal. It is the card money your processor is still holding before it pays you, so as long as you are taking card payments there will be some. Each time your processor pays out, FlexBooks creates a deposit that moves that money out of Undeposited Funds and into your checking account. You can check the balance against your Mindbody Settled Transactions report. See How Does FlexBooks Handle Credit Card Funds?
When to look into the balance
- It keeps climbing week after week. Check first for cash and checks you deposited but never recorded. That is the most common cause, whichever setup you are on.
- Card money is piling up. If your card money goes here, FlexBooks clears it with a deposit each time your processor pays out, so a balance that keeps growing means some of those deposits are missing. The usual reasons are that syncing stopped, or a FlexBooks deposit was deleted. Check syncing first, and tell us if that is not it. See Why Did My FlexBooks Account Stop Syncing?