How to Simplify Bank Reconciliation in QuickBooks QuickTip

Using the QuickBooks Undeposited Funds Account

If you automatically deposit your received payments into a specific bank account in QuickBooks, you may find it difficult to track your bank activity and reconcile your account unless you actually make a separate deposit for each payment received. Fortunately, there’s a better way. Take advantage of the Use Undeposited Funds As A Default Deposit To Account. Turning this option on will make QuickBooks place all received payments into the Undeposited Funds account by default. When you make an actual bank deposit you can make the same deposit in QuickBooks by using the Make Deposits window and selecting (from the Undeposited Funds account) all the matching payments. Turning it off means you will have to fill in an account when you enter data into the Receive Payments and Enter Sales Receipts windows. To select this option in QuickBooks:

  1. Choose Edit | Preferences from the QuickBooks menu bar.
  2. Click the Payments icon on the left pane and then click the Company Preferences tab.
  3. Click the checkbox labeled Use Undeposited Funds As A Default Deposit To Account in the Receive Payments box to select this option.
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