How to clean up Undeposited Funds in QuickBooks Online

hey everyone this is Veronica Wasik with the five minute but keeping that comm blog where we show you how to minimize bookkeeping and maximize profits do you have undeposited funds in your quickbooks and are those balances really old well you're not alone this is an area that most untrained users struggle with in the fact that they don't know where undeposited funds come from and they don't know how to get rid of them once they start accumulating in their QuickBooks so we're going to show you today in this tutorial the main reasons why you have old undeposited funds in your quickbooks and not only that we're also sharing with you our expert tips and tricks on how to clean that up so in fact we'll share with you our two methods that we used for cleaning up undeposited funds if you like this video click the like button subscribe to our channel to get the latest quickbooks online tutorials and cleanup topics as well as tips for growing your bookkeeping business and also visit our blog at 5-minute bookkeeping calm and here's Andre with the tutorial hi there fellow QBO users today I'm gonna show you how to clean up undeposited funds in QuickBooks Online so the number one reason for old customer payments in undeposited funds is an improper workflow an improper workflow happens when untrained users don't follow the proper order of money and transactions let me introduce you to Eric eric is new to qbo and doesn't understand the qbo money and workflow let's go over what Eric did first Eric created an invoice in qbo for $200 on March 1st and sent it to his customer cool cars later on March 21st Eric received the $200 payment from his customer cool cars and he recorded that customer payment in QBO he recorded the payment to undeposited funds because eric isn't familiar with the qbo money and workflow he happens to working in the QBO banking section and sees a money and transaction for $200 without giving it much thought he adds the $200 transaction to qbo by clicking on the Add button without paying much attention to the details like how the transaction is defaulting to uncaged income but later when he's reviewing his numbers Eric sees a $200 balance in undeposited funds on his balance sheet alarmed eric opens the bank deposit window this window shows the customer payments which are currently in the undeposited funds account and there he sees that $200 customer payment from cool cars so why is it still there well it's there because eric used an improper workflow and now he's left with an old customer payment which is sitting in undeposited funds and a money in transaction categorized to uncatted rised income i'm now going to show you two methods you can use to clean up undeposited funds first the remove and record method and second the dummy bank account method now I'll show you how to clean up undeposited funds with the remove and record method begin by going to the banking section in QuickBooks Online next select the bank account that was used to add that $200 money and transaction then select the in QuickBooks tab now locate the $200 money and transaction then click undo this will remove the transaction from qbo but remember how there's still a 200 dollar payment from cool cars sitting in the bank deposit window well now we're going to record a deposit for it I'll open the bank deposit window select the checking account enter the date of the deposit now I'll select the $200 customer payment from cool cars in the select existing payments list and I'll select save and close now if I go back to the banking section the downloaded money in transaction will match to the $200 deposit which was just recorded simply select match and there you go we just fixed an improper workflow scenario with the remove and record method next I'll show you the dummy bank account method for cleaning up undeposited funds so what do you do when you have multiple old customer payments sitting in the bank deposit window but you don't remember how they got there you clean them out with a dummy bank account a dummy bank account is exactly like the name suggests it's a fake bank account that you can create and quickbooks online to clear out old customer payments i'm going to begin by creating a dummy bank account in the chart of accounts once I've created the dummy bank account I'm going to open the bank deposit window I'll select the dummy bank account as the account I'm going to be depositing to I'll select the customer payments that I want to clear out as you can see the total deposit is for $300 and then I'll select save and close so now because I recorded a deposit there's money in the dummy bank account but there shouldn't be after all it's not a real bank account so I'm going to take the money out of the dummy bank account by creating an expense transaction in QuickBooks Online under a bank or credit card account I'm going to select the dummy bank account under account I'll select an income account try using an income account that you use on a regular basis under amount I'll enter the same dollar amount as the deposit that I just recorded the deposit was for $300 so I'm going to make the expense for $300 as well and finally I'll select save and close once I'm done I'll verify that the ending balance in the dummy bank account is zero to do this I'll go to the chart of accounts find the dummy bank account and if I look at the balance column the amount should be zero that means that everything is clear I just shared with you two methods for cleaning up undeposited funds but how do you know which method to use let me go over the pros and cons of each method first the pros and cons for the remove and record method the pros this is the most accurate way to clean up payments and undeposited funds and it will eliminate any redundant transactions and your sales income will also be correct the cons you must work through each payment one by one so the process may be time-consuming you must also have documentation to back up all the transactions that you are correcting next let's go over the pros and cons of the dummy bank account method the pros this is a quick and easy way to clean up old and outstanding payments you'll also save a lot of time using this method the cons although you may save time you may lose accuracy cleaning out undeposited customer payments with a dummy bank account will understate your income if you feel like you need further assistance you should seek help from a certified QuickBooks Online pro advisor click the link in the description box for the full blog post

Channel: 5 Minute Bookkeeping

Views: 132,233

Keywords: QuickBooks Online Training, QBO, QuickBooks Online Expert, QuickBooks Online Video, QuickBooks Online Lessons, QuickBooks Online Class, QuickBooks Online Learning, QBO Undeposited Funds, QuickBooks Online help, QuickBooks Online Clean up, QuickBooks Online Bank Deposit, QuickBooks Online Transactions

Id: V4iPVyZZIG8

Length: 8min 13sec (493 seconds)

Published: Mon May 07 2018