QuickBooks Tutorial - The Undeposited Funds Account Demystified

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[nerdenterprises]

Thanks! I love when people love me :)

You have to give the customer credit for paying the invoice so you enter a payments as though they paid. Then Quickbooks will want you to deposit that money somewhere. So do it. Then add a negative line item in the deposit zeroing out the deposit and use the owner's draw account.

[nerdenterprises]

I'd have to see it to be able to fix it, but I can tell you that I have seen a bit of this recently as in this year. I think that the only way to fix it may be to go back to the original transaction that it comes from, delete it and then re-post that transaction. This will throw your bank rec off by the $54 but you can re-reconcile and you should be ok.

[nerdenterprises]

Hi Richard! The Paypal fees are simply going to be a reduction of the deposit amount. So you sell an item for (eg) $100 and Paypal takes $3.00. Record the sale and put the payment in Undeposited Funds. That way you can deposit the amount and then add a line item for -$3.00 and book that to Credit Card Processing Fees. The handling fee should be picked up entirely as income and that will net out with any expenses you incur.

[jalaljanjua]

Knowledge is power! And you do have the ability to simplify seemingly complicated matters. Thanks so much!

[VonMilash]

@nerdenterprises every company in north America has an account called something like UF or in transit or the like. it really isn't difficult.

[nerdenterprises]

So when they review a balance sheet and ask, "what is this undeposited funds account?" I am to assume they understand it perfectly well?

[louisguerrero]

So I was reconciling my bosses account and I there were deposits missing so I thought she just forgot to add them so I just added them but I didn't realize there were invoices that she forgot to click receive payments and I think I just made a mess of things. I tried to delete the deposits I made and I think I deleted some deposits from the invoices and I really hate the undeposited funds account. I can't make any changes to it because its an account created by quickbooks.

[nerdenterprises]

@chrispyhall193 Oh well! Most people seem to like my style. Maybe try another more recent video?

[richardepoulinjr]

Watched two of your videos and they are really helping me get a grasp on QuickBooks. I need to know how handle PayPal fees and prepaid postage I receive from my customers. I usually ship in one or two days and the other item is I usually have additional income left over (handling fee) since I don't want to lose money a postage costs. Any help would be appreciated.

[louisguerrero]

I can't seem to balance the undeposited funds account

[louisguerrero]

its really simple she creates an invoice and receives the payment for it. I don't understand what I did to not have the same invoices and matched deposits.

[louisguerrero]

never mind I figured it out. that's what smart people do

[VonMilash]

I highly doubt there are CPAs that don't understand the UF account.

[nerdenterprises]

I disagree. Keep in mind many CPA's do not use QuickBooks other than to Run a P&L and Balance sheet so they can use that information to prepare a tax return. Of course once you explain it, they understand it. Many do not seem to like it and that is because they don't understand the mechanics - how it allows you to group payments into a single deposit.

[VonMilash]

@nerdenterprises any cpa that doesn't have at least a rough idea of what it is, is not worthy of the designation.

[chrispyhall]

This video is weak! Grainy, you move to fast and your explanations are not that clear. I definitely would not go to this company for training.