Hello, welcome. It's Candus Kampfer and in today's QuickBooks tips and tricks,
we are gonna talk about undeposited funds.
So this is a common
challenge for businesses if you don't understand
what it is and how it can benefit you,
if you need it.
So undeposited funds is like what I consider like a bank bag.
What it means is you've received
payments, whether it's cash or checks or credit cards
into your business
through you created the invoice and received payment,
or through a sales receipt and you receive payment.
So what happens is QuickBooks
holds all those payments for you in this account called undeposited funds.
And then you can tell QuickBooks, okay, I've deposited it now.
And so I think of it as like a bank bag.
And when you actually physically go to the bank, or you're ready to go to the bank,
you make that deposit within QuickBooks.
And it allows you to reconcile your bank account with your bank statement
easier.
Because when you go to the bank, and you've had five checks,
that's also what you actually put into QuickBooks,
so it makes life
much simpler.
So come look over my shoulder, I'm gonna show you how you can choose under preferences
to have undeposited funds selected
so that it works, that account is exists.
Or if you don't need that, you can actually have it go directly into your bank account for you.
And it saves you a step.
So come look over my shoulder.
Okay, so you're looking at my computer screen
and this is a QuickBooks sample file that I use for training.
And so
as I was explaining in the video, there is a little account,
you don't really see it, but it's basically sitting right here
that I call undeposited funds. It's like a little bank bag.
And so the benefit to that is if you're
creating invoices, and you're receiving payments,
or you're creating sales receipts with payments,
and you have multiple of them, and then you take them to the bank,
it allows you to use this account called undeposited funds,
so that when you go to reconcile, which I highly recommend you do,
it makes your life easier.
So let's say that
you are not currently, I'm gonna show you the receive payments,
you're not currently in need of this undeposited funds, I'm gonna show you
how you can adjust it.
But I really recommend you use it, it even though it's an extra step
But if you don't need it,
this is how you get rid of it.
So right now you'll notice that it doesn't tell you which account, it's going to
it just automatically goes to undeposited funds.
If you go under edit,
preferences,
and you go down to payments,
and click on company preferences.
The third one under paying, received payments is
undeposited funds as a default deposit account,
you unselect that,
click OK.
It will close all your windows.
And what it's gonna do, is it's gonna allow you
now when you go under receive payments
to select which account you want it to go to.
So you can select a customer.
Let's go down to Adams candy shop because I know we've used him before.
And I called it
something other than Adams
but I'm on top of my game today.
So let's just say that we got $100, or $55 let's just say $55.
They sent us a check.
And
we'll use December 15th, that's the automatic date its selecting,
even though
we're not in even December or in 2018.
But anyways,
you'll notice that you can choose cash, cheque,
different types of payment,
then you can put in your check number.
And then here it's saying undeposited funds,
or you can actually put it directly to a checking account if you want.
I'm actually gonna use undeposited funds, I can show you how this feature works.
So I'm gonna select these two
invoices which the oldest invoices that total
$55,
which is the amount of the check,
I'm gonna save and close it
and it made a little beep so that you know that it did it.
And then you click Record deposit.
And you'll notice
that the undeposited,
undeposited funds screen pops up, meaning you have some payments you can deposit.
So I'm gonna select the $55 that I put in today as a payment.
I'm also gonna select these other two payment
for Adams candy shop and Julie's dollhouse
which totals 165. So I'm actually saying,
I've received three checks.
I click OK.
What it does is it says okay, at the top which account do you want it to go to,
which bank account?
What date?
Who is it from? This automatically pulls from your payments you received
and it directly says it's coming from undeposited funds.
So,
when you receive the money,
it's
at the time you originally received it. I'm gonna minimize this real quick.
So at the time you originally received it, you had an invoice, you received it,
it takes it from accounts receivable and puts it in undeposited funds
Then when you actually deposit it,
it takes it from undeposited funds and actually puts it into your bank account.
And then you have, if you have classes and all that you can put all this information in
I'm gonna actually click Save and Close.
So now what it did is instead of when I'm in receive payments,
having it go directly into my bank account,
it goes to undeposited funds.
And then,
when I go into my actual check register, instead of having three checks showing up,
it's only gonna have the one deposit right here, the 165. If I double click on it,
it brings up all those payments.
So the benefit to this is,
if when you're going to the bank, you're actually taking three checks,
it will simplify
your bank reconciliation,
because when you go to reconcile,
it's only gonna see the $165,
which hopefully matches exactly what you actually took to the bank.
So I hope this tip was beneficial to you, I really recommend using undeposited funds,
often what people do, if they receive the payments,
and then they don't see it in the bank account, and then they do
it has a sale again, and actually duplicate their sales.
So,
if you do,
have that problem where you've duplicated using your undeposited funds,
you can actually go under lists,
Chart of Accounts.
And you'll see that there's an account called undeposited funds.
If you look at that
it should either be zero, or the exact same amount of cheques that you have or cash
that you have
at your place of business, where you keep your checks.
You also use the exact same feature for your credit cards
So you're receiving payments of credit cards.
And then when your credit cards batch out at the end of the day
you record your deposit.
If you,
don't have multiple checks, you only do one check at a time,
like my husband's business for example, in construction,
we typically work on one job at a time.
So when we receive payment, it's usually a large enough cheque that we just do one deposit
at a time.
So let's just say that was our example.
And we were in
the candy shop again.
And we want to put it directly in our checking account because it's the only check.
And that's how we do it everytime.
So if it's,
sometimes we deposit
multiple checks, and sometimes we only do one check,
I recommend undeposited funds.
If every time you'll only ever deposit one check,
then you can do
pick your checking account,
and then click Save and Close.
And what you'll see
is your deposit
for $100
is right here.
So and it says from accounts receivable
versus
see when it comes to it, when you double click on it, it doesn't go into make deposit
it actually brings you back to
the
receive payment screen.
And it comes, directly goes to accounts receivable.
So it just,
clears the undeposited funds account altogether.
So you can use either one.
Just make sure that whichever one you're using,
matches what's in your bank account
what you're doing within your bank account.
So I hope this tip was helpful for you,
have an amazing day and if you know somebody who could benefit from it,
please SHARE it and if you have a QuickBooks
question, I always get inspired by other entrepreneurs.
So if you have a QuickBooks question, please leave it below and I'd love, or message me
and I look forward to creating a QuickBooks tip and trick for you.
Have an amazing day.
I'll talk to you guys soon.
Bye-bye.