While bookkeeping, the goal is to match every dollar in with every dollar out to avoid financial discrepancies. But sometimes, users might face issues while reconciling payments due to undeposited funds. If you are a QuickBooks Desktop or Online user, you might encounter scenarios where customer’s payments show as “paid but not deposited.” In this blog, we will discuss undeposited funds and how to resolve the QuickBooks Payment Not Deposited issue.
If your QB payment is not being deposited, it can create frustration and affect the reconciliation process. You can follow the instructions given in this guide to fix this undeposited fund issue seamlessly. But if you require a quicker way to get your problem solved, you can also consult our support service via phone number 1-855-542-9309, where you will get help from specialists directly.
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Undeposited Funds in QuickBooks: Brief Overview
The undeposited funds account in QuickBooks is an auto-generated feature that acts as a virtual space for storing client payment details. This amount is usually charged to this account at the point of paying through a check or any type of sale receipt. This process is crucial for maintaining accurate financial records and proper reconciliation and aids in the following –
- It holds invoice payments and sales receipts until you can deposit them into the concerned bank account.
- The undeposited funds account allows you to combine more than one payment into a single bank deposit.
- The account helps maintain a detailed trail of incoming payments before officially depositing them.
- It makes it easier to match your QB records with your bank statements, which makes reconciliation seamless.
Main Reasons Why QuickBooks Payment Shows Paid but Not Deposited
If you encounter the QuickBooks payment not deposited status, there might be a buildup of funds in the temporary undeposited funds account. This scenario in QB Desktop and Online versions can be a result of the following common reasons –
- The process of recording the transactions is incorrect, and you are not following the proper process to record the money-in transactions.
- You are adding the payments directly to the income account without using the undeposited funds account in the middle.
- You are not processing the bank payment regularly, which causes a build-up of QuickBooks undeposited funds.
- Certain payments might have been overlooked or missed while making the bank deposits via QuickBooks.
Recommended to read : How to delete Duplicate Invoices in QuickBooks?
Practical Methods to Clear Out/Manage Undeposited Invoices in QuickBooks Online
If your QuickBooks deposit is not showing in the register, you must follow the methods mentioned below to clear out the undeposited funds in QBO –
Note: If it is your first deposit with QuickBooks Online payments, it might take longer for the deposit to reflect in the account. You must check the deposit speed in QBO by using these steps –
- Log into QBO, go to the Workspace, and use the Gear button to select Account and Settings.
- Navigate to the Payments tab and look at the Deposit Speed to know the time taken.
If the deposit timeframe isn’t exhausted, wait for the deposit to show up in the register. If the timeframe is complete, follow the methods below to clear out the undeposited funds –
Method 1 – Reconcile the Data and Clear the Undeposited Funds
In this method, you first need to reconcile the data, then clear the undeposited funds using the following instructions –
- Open QuickBooks Online and select Reconcile from the Settings menu.
- Keep your bank statement handy; choose the bank account and enter the start and end dates for the statement.
- Further, click Start Reconciling, match each entry from the bank statement to the corresponding entry in QB, and verify the balances.
- Once the data is reconciled, click Finish and click the + icon in QuickBooks Online.
- Select Bank Deposit, locate the payments that need to be deleted, and check the transaction details by clicking the customer’s name.
- Go to the bottom of the payment screen, click the More icon, and select Delete to remove the particular entry.
Method 2 – Use Bank Reconciliation
Another method to fix the QuickBooks payment not deposited issue is via bank reconciliation, as mentioned below –
- Start by making the required deposits in your real-life bank, and then review the bank statement for the cleared funds.
- Use the bank deposit feature to combine transactions in your undeposited fund account and review the checkboxes for the undeposited payments you want to combine.
- Finally, ensure the total amount is the same as the amount in the bank statement and end the process.
Method 3 – Use the Dummy Account Method
You can use the dummy account method to resolve the QuickBooks “paid not deposited” status by using the steps given below –
- In QBO, move to the Chart of Accounts section, create a new checking bank account, and create a temporary/fake name to avoid confusion with the real account.
- Save the account and close it, then open the Bank Deposit window and choose the dummy account you created in the Choose Account category.
- Now, choose all old consumer payments displayed in your undeposited funds, save them, and close.
- Once you’ve done this, the balance in your undeposited fund will be zero; then proceed to clear the dummy account you created.
- Click on the Expense window to create an expense transaction and select an income account that you use to transfer money from a dummy account.
- Finally, transfer the entire balance and ensure the balance in your dummy account is also zero.
After this process is complete, you will be able to go to banking and clear the undeposited funds, and the problem with QuickBooks customer payments not deposited will be solved.
Learn How to Handle/Manage Undeposited Funds in QuickBooks Desktop
If your QuickBooks invoice is paid but not deposited, you can implement the following steps in QBDT to resolve the issue –
- Using QuickBooks Desktop, first, go to the Banking panel and navigate to the respective button, Make Deposits.
- Further, select the payment you want to remove from Undeposited Funds and pick the appropriate bank account for the deposit.
- Enter the deposit date and other required transaction details and save the deposit to clear the amount from Undeposited Funds.
Now, check if the undeposited funds have been cleared and the payment deposit issue in QB has been resolved.
Also See : Fix QuickBooks Open But Not Showing Issue
Resolve the “Paid Not Deposited” Error on Invoices Using QuickBooks Payments
If your QuickBooks payment is not deposited to the bank account, you can use the manual process to allow your customers to submit the credit card info. There might be times when the customer inputs the wrong credit card number or other details incorrectly, which in turn causes the ‘QuickBooks payment not to be deposited.’ To fix this, you must delete the payment and re-sent the invoice to the customer by implementing the steps below –
- Select Sales from the left-side menu, then click Customers from the top menu, and locate the customer to whom you sent the invoice in the list.
- Click on the particular customer name, select the invoice with the “paid – not deposited” status, and click on the Payment link in the top-left corner.
- Further, navigate to More at the bottom, delete the payment with the error, and re-open the invoice to be paid.
- You can either send the invoice to your customer to re-submit the payment through the Pay Now link or manually process the card for them.
Once the payment is reprocessed, check it to ensure the issue of the payment not being deposited is rectified.
We hope the solutions provided in this troubleshooting guide help you fix the issues with the QuickBooks payments. However, if these solutions don’t work and your QuickBooks payment not deposited, you might need outside assistance to fix the issue. For this, reach out to our team of QB professionals at 1-855-542-9309 to get the best support assistance in fixing the QB payment issue.
Common User Questions
How can I avoid undeposited funds in QuickBooks in the future?
QuickBooks advises against having large undeposited funds, and you can release these into the appropriate accounts by linking your bank and credit card accounts and frequently updating the details. By doing this, you can ensure that every transaction is automatically downloaded in QuickBooks Desktop and Online.
How often should the undeposited fund account in QuickBooks be reconciled to prevent the “QuickBooks payment not deposited” issue?
You should reconcile the undeposited funds account in QuickBooks regularly (a weekly or monthly reconciliation is ideal). Frequent reconciliation helps identify and correct discrepancies promptly. It also ensures that all payments are accurately recorded and deposited in the concerned bank account. Moreover, you can maintain precise and updated financial records, which helps in accurate financial reporting.
Can I remove the undeposited fund account from QuickBooks entirely?
While it’s not possible to delete the undeposited fund account in QuickBooks, you can remove the individual payments from this account as follows –
– Go to Chart of Accounts from the Lists tab and click the Undeposited Funds option.
– Select Amount, then right-click the amount and click the Delete option.
Erica Watson is writing about accounting and bookkeeping for over 7+ years, making even the difficult technical topics easy to understand. She is skilled at creating content about popular accounting and tax softwares such as QuickBooks, Sage, Xero, Quicken, etc. Erica’s knowledge of such softwares allows her to create articles and guides that are both informative and easy to follow. Her writing builds trust with readers, thanks to her ability to explain things clearly while showing a real understanding of the industry.