Undeposited Funds/Undeposited Funds account is a default account in QuickBooks Online that holds funds from payments to your company until you deposit them to your bank account. Think of the Undeposited Funds account as an envelope where you keep checks/cheques until you take them to the bank.
If you receive more than one check/cheque or payment in a day, you may want to group them all into one deposit. You want to enter those transactions so that your Quickbooks Online Bank Register matches your Bank's monthly statement.
Steps to record a payment as Undeposited Funds:
- Select the Plus icon (+) at the top, then Receive Payment.
- Enter the customer's name and the date you were paid.
- Enter the payment method.
- For the Reference Number, enter the check number.
- In the Deposit To drop-down, choose Undeposited funds.
- Choose Save and close.