How to clear undeposited funds in quickBooks?
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It seems that you are also like us, who did not find Undeposited Funds beneficial while using QuickBooks desktop or online. For this, if you are thinking of how to clear undeposited funds in QuickBooks online as soon as possible, then don’t go back and have the right support from this page. Many users have used this account but for many users, it was not intuitive for them. You can ignore this account if your payments are not passing through any check or cash or any other receipt. 

After depositing the transaction you are also able to put variation into the payment that you have attached to ignore all the duplicated transactions. The ways of clearing undeposited funds in QuickBooks Online (with two methods to clear a UF account) and QB Desktop (with one method) are completely different. Are you thinking about how to clear out undeposited funds in QuickBooks? If so, go down and read on to learn more.

Reasons for Building Up an Undeposited Funds Account

If a user follows the wrong methods of industry benchmark to money in the transaction, then the buildup chances increase in the undeposited funds account. 

The user does not deposit payment and register this money as the correct earnings that are the reason user faces a buildup in his UF account. Instead of this step, the user should add this payment to any type of income account from QuickBooks or any specific banking sector. 

How to Clear Undeposited Funds in QuickBooks | Best Options

This UF will be avoided if you connect your credit card and bank accounts so that every transaction can be downloaded automatically by QuickBooks. In addition to this, you can also remove UF accounts by taking credit cards or another option of online payment mode such as Automated Clearing House (ACH). Here, you can not be disturbed due to the long list of exercises as every transaction is getting operated as a single transaction. There is no heap of payments in the statement section of your bank account. 

Steps to Clear Undeposited Funds in QuickBooks Online

There are two different methods to avoid undeposited funds in QuickBooks. The first is called a dummy account and the second one is removed and recorded. 

Method 1:- Dummy Account 

In the matter of “How to clear up Undeposited Funds in QuickBooks”, you are required to have a dummy bank account. By this, the amount will be transacted correctly from the UF account to that given specific dummy bank account.  

  • From the Settings tab, Select the option Chart of Accounts–> Choose the “Create New” option. 

How to Clear Undeposited Funds in QuickBooks Online by creating dummy accounts?

  • Add a name to this real-time new account. 
  • Put all the required information correctly. 
  • Hit on the “Save” tab. 
  • From the “Bank Deposit” section, select “Dummy Account”
  • As per your wish, clear all the to-be-deleted payments.
  • Press “Save” for all the changes. 
  • Choose the option “Expense” –> select the similar dummy bank account that you have given. 
  • Click on the bank account that is getting earning-related details. 
  • Hit on the “Save” tab. 
  • Visit the Dummy bank account to recheck the balance if it has come to zero or not. 
Method 2:- Removing and Recording 

You can easily change over any transaction in QuickBooks which is unclassified with the inflow of cash. It will help to remove the specific undeposited funds. Also, this will assist you to add the real amount as well as the proper statements after deleting all the errors which are in your banking entries. 

  • Open the QuickBooks Account and go to the “Banking” button. 
  • Visit your “Bank Account” option. 

Visit your “Bank Account” option. 

  • Tap on the “Undo” tab on the option of “uncategorized money in transaction”
  • Look for the “Bank Deposit” button. 
  • Select the systematic bank account. 
  • Put the date of payment. 
  • Select the option of Remove payment. 
  • Click on the “Save” tab and Close.

Note:- You can delete any specific amount of payment from the Undeposited Fund account. Then, that mentioned amount will be attached to your real-time bank account. 

Read More - How to Delete a Deposit in QuickBooks Desktop?

How to Clear Undeposited Funds in QuickBooks Desktop?

There are some dissimilar steps for removing the undeposited funds in QB desktop if we compare it to QB online. You don’t need to be confused as we have shared all the necessary steps to clear UF. 

  • Open your QuickBooks Desktop –> Go to the “Settings” tab. 

QuickBooks Account and Settings

  • For the dropdowns, you can see several options. Choose the “Make Deposits”
  • Select the unwanted payment that is required to be deleted from the undeposited fund account. 
  • Choose your payment→ press OK→ click on the tab “Deposit” when the deposit window comes up. 
  • Opt. for your specific bank account from the given bank options. 
  • Put all the right information such as the date of deposit and others in the details of the transaction whatever you think to register. 
  • Save those details → Click on the “OK” tab. 
Read More - How to Setup and activate QuickBooks Direct Deposit?


We have tried to give all the information which is important only for you. We don’t want you to be confused a bit about how to clear undeposited funds in QuickBooks desktop or online. If you have any questions and want to clear it as quickly as possible then don’t hesitate to reach out to us. 

Frequently Asked Questions (FAQs) 

Q.1 – What is an Undeposited Funds Account? 

Answer – If you also find the undeposited funds on your balance sheet then you need not be worried as it is also a supporting system for some different types of businesses. But it is also true that it becomes useless for other businessmen too. Like if you receive payment from anybody else at the same time it has to be deposited in the bank accounts. This undeposited fund works for tracking all the records of money transactions. So it makes the reconciliations of your bank simpler. 

Q.2 – Why are my payments going to undeposited funds in QuickBooks?

Answer – QuickBooks online has a system that sends all your deposits in a temporary account and that is called undeposited funds. Before sending these deposits to your bank, this stops all payments collected from invoices. It also offers advantages for some of the users who are deeply attached to the payment-related information and trained too for this matter. 

Q.3 – What do undeposited funds mean in QuickBooks Online?

Answer – The undeposited fund (UF) account catches all the payment records in QuickBooks and it continues until you don’t think to deposit the exact similar payment in your bank. Often the banks adjust all the payments collectively whatever has been deposited into one transaction. You can complete the same in your QuickBooks when you are having a deposit slip and also get the details about whichever payment amounts the bank merged. 

Q.4- What is the journal entry for undeposited funds?

Answer – You should keep in mind some basic ways for writing journal entries. It will help you to cover the records of undeposited funds account transactions.

  • Transaction Date and Day.
  • Details of credit and debit account whatever is from your temporary account (undeposited fund) to your bank account. 
  • You should match the figure used within the credit and debit amount transaction.
  • A good note and explanation for the transaction.

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