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About this lesson

In this lesson, we cover how to deposit payments that are combined with other payments and taken to the bank at once.

Quick reference

Combined payments (Undeposited Funds)

Undeposited funds is a temporary account used to hold funds that will be later combined into a single deposit at the bank.

When to use

If you are taking multiple deposits to the bank at once, your bank statement will show the total amount deposited. For ease of reconciling and to reduce the chances of recording duplicate income, you should match QuickBooks match the bank statement. Using undeposited funds will allow you to do this.

Instructions

From an invoice payment or sales receipt:

  1. Instead of selecting deposit to checking, select deposit to undeposited funds
  2. Select + New, under the column called other, select bank deposit 
  3. The transactions in the top section called Select the payments included in this deposit are the sales receipts and invoices deposited to undeposited funds
  4. Determine which payments are being combined and check the corresponding boxes on the left
  5. Verify your total by looking at the bold number in the upper right hand corner, this number should equal the value that will appear on your bank statement

Hints & tips

  • This is useful for combining cash or checks that you'll take to the bank but it's also useful for combing credit card deposits.
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  • 00:04 In this video, I want to talk to you about how you can apply multiple customer
  • 00:09 payments or deposits into a single deposit in your bank register.
  • 00:13 Two examples of when this might be useful is one, if you're taking multiple checks
  • 00:18 to the bank, the bank teller is going to give you a receipt with the grand
  • 00:21 total rather than individual receipts for each of the checks you've deposited.
  • 00:26 The second is if you have a credit card machine, or if you take credit card
  • 00:30 payments from a customer, you're going to have multiple payments on each deposit.
  • 00:34 Or maybe you want to keep track of whose money you've collected,
  • 00:37 even though the grand total is a different amount.
  • 00:40 Let me show you how to do this in QuickBooks.
  • 00:43 First, we'll create sales receipt,
  • 00:44 and we'll indicate that the money is going to be combined with other funds.
  • 00:48 So I'm just going to zip through this,
  • 00:50 since we've already covered how to create a sales receipt.
  • 00:53 I'm going to use Cheesy Chester, because it's just such a fun name.
  • 00:57 We're going to sell them Four Hour Training.
  • 01:00 And then over here at the top where it says payment method,
  • 01:03 we're going to pick whatever method, so I'll just say Credit Card for this one.
  • 01:07 And then Deposit to, up until this point we've always said deposit a checking.
  • 01:13 Here, we're going to say deposit to Undeposited Funds.
  • 01:16 And that means, put this money is somewhere in QuickBooks,
  • 01:20 and later, I'm going to grab it out of that somewhere, and
  • 01:23 I'm going to deposit it into my bank register.
  • 01:25 So I'm just going to choose this and then Save and
  • 01:28 close, because I don't need to send it anywhere.
  • 01:31 I'm going to imagine that I also have a payment that I've received from a client
  • 01:38 So we're going to say that Gleeful Gizmo also made a payment by credit card.
  • 01:43 So it doesn't matter that it's two different kinds of money we have received,
  • 01:46 maybe one was the sales receipt and one was an invoice that just got paid.
  • 01:51 We're just going to say all right, we've got this money, and
  • 01:54 we need to combine it together into one deposit in our bank register,
  • 01:57 because that's how it's going to come from the bank, right?
  • 02:00 We take the credit card payment, the credit card company processes it,
  • 02:04 and then gives us the deposit all at once.
  • 02:07 So I've got both of those, they both went deposit to undeposited funds.
  • 02:11 In the lower right hand corner, I'm going to say Save and close.
  • 02:15 Before you deposit them into the bank register,
  • 02:18 I want to show you what it looks like right now.
  • 02:21 I'm going to hop over to my balance sheet, so I'm going to click on Reports.
  • 02:25 I'm going to come down to Balance Sheet.
  • 02:28 So when I look at undeposited funds,
  • 02:30 I can see that I have a balance of 1,598 in my undeposited funds account.
  • 02:36 That means I've collected 1,598 from my clients, and
  • 02:40 I've applied this money to their various accounts, but
  • 02:42 what I haven't done yet is deposited that money into my bank register.
  • 02:47 Let's go ahead and do that together.
  • 02:49 We're going to go to the New in the upper left hand corner.
  • 02:53 We're going to go to the right hand side and
  • 02:55 click on the words of Bank deposit under the header of Other.
  • 03:00 I can see I have these two payments on the top section of my bank deposit.
  • 03:05 The top section of a bank deposit is what we call undeposited funds.
  • 03:09 When I check off the two payments,
  • 03:11 it brings the total in the upper right hand corner to 1,598, exactly
  • 03:16 the amount that we saw when we looked at the deposited funds on the balance sheet.
  • 03:21 This is telling us that we're going to deposit 1,598 into the bank.
  • 03:25 The bank receipt we get from the teller will be for a total of 1,598,
  • 03:30 it's going into Checking 1234 on the date of 9/30.
  • 03:34 I'm going to go ahead and select Save and close.
  • 03:38 On my balance sheet, I can see my total is $0.
  • 03:42 That's because I've taken the money out of undeposited funds and
  • 03:46 put it into my register.
  • 03:47 If I clicked on the total amount of money for my checkbook register,
  • 03:52 I'll see my deposit sitting there.
  • 03:54 Let's go to the bottom.
  • 03:56 So if I inch over to the right,
  • 03:58 you can see there's my deposit of 1,598 into my checking register.
  • 04:02 I hope this helps, and I look forward to seeing you in the next lesson.

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