Using the undeposited funds setting in QuickBooks shows in more detail your actual deposits and makes it easier to reconcile your checking account every month. Allow me to show you the value of udeposited funds.
Let’s say you received three checks from customers on a certain day for:
- $1,039.27
- $3,965.00
- $4,313.65
If you choose to deposit each check directly into your bank account, your checking account register will show three individual checks deposited. If you deposit all three at one time, your checking account statement from the bank will show a deposit of $9,317.92.
When you reconcile your checking account at the end of the month, you will have to go back and figure out which checks were in which deposits. This could be a guessing game in trying to figure out which checks were included. This is a time-consuming, annoying and unnecessary task.
Using undeposited funds allows you to keep records in QuickBooks that:
- Record individual checks as received
- Allow you to select which checks are included in a deposit
Using the undeposited funds function provides information from both the individual check side as well as the total deposit amount. By using this, you would record each of the three checks received, then select those three checks in “making a deposit” with a total of $9,317.92. The total deposit will be reflected in both your check register in QuickBooks (individual checks are easily viewed by drilling down on the deposit total) and on your bank statement.
Harriet Gatter, owner of Accounting Support LLC, was an ad specialty distributor for 23 years and an adjunct professor of accounting at Neumann University. She sold her promotional products business in 2012, became certified as a QuickBooks ProAdvisor, and now works exclusively with ad specialty distributors nationwide on their QuickBooks and accounting needs.
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