Using the Undeposited Funds account
- John Hewitt
The Undeposited Funds account is designed to temporarily hold payments you’ve received but haven’t yet deposited into your bank. It helps you track money in transit, such as checks or cash payments, until they’re deposited into your bank account.
The Undeposited Funds account is not created manually. It is automatically generated when you start invoicing clients.
Why use the Undeposited Funds account?
When your clients pay an invoice, the funds may not go directly into your bank account right away. They might remain undeposited for some time. The Undeposited Funds account allows you to record these payments and maintain accurate records of your receivables before the funds are deposited into your bank account.
How to use the Undeposited Funds account
Apply a payment to an invoice
When you receive a payment from a client, open the applicable Invoice (Business tab -> Invoices tab).
Select the Receive Payment button.
In the Deposit Account field, choose the Undeposited Funds account to temporarily hold the payment.
Select the Apply button.
The Invoice will now show the payment. The payment will also appear in your Undeposited Funds account.
Deposit the payment
When you deposit the funds into your bank, record the deposit in Quicken.
Open the Undeposited Funds register.
Create a linked transfer from the Undeposited Funds account to the deposit transaction in your checking account. This will ensure that your financial records accurately show the movement of money.
Example
Receive payment
A client pays $500 for an invoice. You record the payment, selecting Undeposited Funds as the Deposit Account instead of your bank account.
Deposit funds
A few days later, you deposit the $500 into your bank. You create a linked transfer from the Undeposited Funds account to the deposit transaction in your checking account. This shows that the funds have been deposited and are now available in the bank.
By following this process, you will organize your financial records and ensure that your accounts accurately reflect the movement of money from your clients to your bank.