How to Clear Undeposited Funds in QuickBooks Online
Trace customer payments to the actual bank deposit. Work through grouped payments, deposits already recorded, and balances that should remain pending.
By CleanUp for QuickBooks · Updated
A balance is not automatically a mistake
Undeposited Funds holds payments before they are included in a bank deposit. A payment still awaiting deposit can legitimately remain there. Start with the real-world money movement: the customer payment, the deposit slip or settlement report, and the bank statement.
Save the account detail and reconciliation reports before cleanup. A zero account balance is not enough by itself; individual payments and deposits must also tell the correct story.
Start with the scenario that matches your records
| Scenario | Check first | Next step |
|---|---|---|
| Payment genuinely not deposited | Payment receipt and whether money has reached the bank | Leave it pending until the real deposit occurs. |
| Several payments became one bank deposit | Deposit slip or settlement grouping | Combine the existing payments into the matching deposit. |
| Bank deposit already entered separately | Original deposit, income account, and related customer payments | Investigate a duplicate income entry before creating another deposit. |
| Processor paid a net amount after fees | Settlement breakdown, fees, refunds, and timing | Explain the net amount with the settlement evidence. |
| Negative balance or old unexplained entries | Transaction history and prior reconciliations | Have a bookkeeper trace the source instead of forcing a clearing entry. |
For payments awaiting a genuine bank deposit
- 1
Locate Undeposited Funds in the Chart of accounts and open its detail. Set a date range covering the payments and deposits you need to trace.
- 2
Confirm the customer payments exist and identify which belong to the real deposit. Payments routed to Undeposited Funds appear in the Bank Deposit workflow.
- 3
Open Bank Deposit using QuickBooks search or the create menu. Select the destination account and actual deposit date, then choose the existing payments belonging to this deposit.
- 4
Compare the total with the deposit record. Investigate a difference before saving; do not add unexplained income merely to make the amount match.
- 5
When the bank-feed deposit is available, match it to the existing recorded deposit rather than adding another copy. Recheck the account detail and bank register.
Worked example: a $1,000 grouped deposit
| Record | Amount | What to verify |
|---|---|---|
| Synthetic customer payment A | $600 | Selected once from the existing payments. |
| Synthetic customer payment B | $400 | Included in the same deposit slip. |
| Actual grouped bank deposit | $1,000 | One deposit in the register, not two new sales. |
If the deposit is already recorded
Search the bank register by amount and date before creating anything. If a deposit was manually recorded as sales income while the related customer payments remain in Undeposited Funds, adding another deposit can compound the problem.
Compare the existing deposit's accounts and linked payments with the settlement evidence. Ask your bookkeeper to determine whether the existing record should be corrected or another workflow is required, especially if it is reconciled. Keep a note connecting the payment records to the final bank deposit.
Verify the cleanup and understand scan limits
After the correction, the specific deposited payments should no longer be pending, and the bank register should contain the correct deposit once. Remaining Undeposited Funds entries should be explainable. Check customer balances and the relevant reports for unintended changes.
Our CSV scan uses individual equal-and-opposite amounts as one matching signal. The $600 + $400 example may not match an outgoing $1,000 line under that rule. A grouped deposit can therefore be flagged even when it is legitimate. Use the report as a shortlist and verify grouping in QuickBooks.
Continue your cleanup
Sources and further help
QuickBooks menus vary by plan and interface. Use in-app search if a menu label differs. These sources support the workflows; synthetic examples illustrate the checks.
Need a list of entries to review?
Scan a supported General Ledger CSV for possible cleanup issues. See the preview free; the detailed report is $29 one-time. You review and make any changes in QuickBooks.
No QuickBooks connection. Findings are review prompts, not a complete accounting review.