How to Clear Undeposited Funds in QuickBooks (Step-by-Step)
If you have a balance sitting in Undeposited Funds in QuickBooks, something hasn't been fully completed. This account is meant to be temporary — a place for payments before they're deposited into your bank. When it isn't cleared properly, you'll start to see issues: bank balances don't match, deposits don't reconcile, transactions feel disconnected. This guide shows you exactly how to clear Undeposited Funds and get things back in sync.
What you're fixing
Before fixing it, it helps to understand the goal.
Undeposited Funds should hold payments temporarily until they're grouped into a bank deposit.
If there's a leftover balance, it usually means payments were never deposited, deposits were recorded incorrectly, or transactions weren't matched properly.
Want to skip the manual review?
Upload your QuickBooks file and see every Undeposited Funds issue instantly — or follow the manual steps below.
Step 1: Review the Undeposited Funds account
- 1
Go to Accounting → Chart of Accounts.
- 2
Find Undeposited Funds.
- 3
Click View register.
What to look for
- old payments
- unmatched entries
- amounts that don't correspond to real deposits
Step 2: Match payments to deposits
- 1
Go to + New → Bank Deposit.
- 2
Select payments from Undeposited Funds.
- 3
Match them to the actual deposit amount.
- 4
Save.
This removes those payments from Undeposited Funds and records the deposit correctly.
Step 3: Check for duplicate deposits
Sometimes the issue isn't missing deposits — it's duplicates. Check for:
- deposits entered manually AND through bank feeds
- multiple deposits for the same payments
If duplicates exist, remove the extra entry and keep the correct one.
Step 4: Fix unmatched or incorrect entries
If something still looks off:
- verify payment amounts
- check bank records
- correct mismatched entries
Some entries may need to be edited, re-categorized, or removed if incorrect.
Step 5: Confirm the account is cleared
After fixing everything:
- review the Undeposited Funds balance
- confirm it's close to zero (or expected level)
- check that deposits now match your bank
At this point, reconciliation should be easier and balances should align correctly.
Common mistakes to avoid
When clearing Undeposited Funds:
- Don't create new deposits instead of using existing payments
- Don't leave partial payments unmatched
- Don't ignore old entries — they won't fix themselves
Cleaning this account properly prevents future confusion.
When this becomes time-consuming
This process is manageable for a few transactions. But if your file has:
- months of data
- many payments
- inconsistent deposits
…it can take a long time to trace everything manually.
Faster way to clear Undeposited Funds
Instead of manually reviewing every entry, upload your QuickBooks export and instantly see all Undeposited Funds issues in one place.
You'll get a breakdown of unmatched payments, incorrect or duplicate deposits, and step-by-step instructions for fixing each issue. This turns a manual cleanup into a quick process.
$5,100 sitting in Undeposited Funds
Payments were recorded but never properly grouped into deposits. Bank deposits don't match and reconciliation becomes difficult.
- 1Open + New → Bank Deposit and select the payments in Undeposited Funds.
- 2Match them to the actual deposit amount on your bank statement.
- 3Remove any duplicate deposits that bank feeds may have created.
- 4Confirm Undeposited Funds moves toward $0 and deposits align with your bank.
Clear Undeposited Funds in minutes.
Upload your QuickBooks file and get a full breakdown of what needs to be fixed.
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This tool helps you identify and fix common QuickBooks issues. It does not replace professional accounting advice.