Undeposited Funds Account
The Undeposited Funds account helps you keep your books aligned with your bank when you receive payments but don’t deposit them right away.
If you combine multiple payments into a single bank deposit (known as a “bulk deposit), this account prevents confusion and makes reconciliation easier.
What Is the Undeposited Funds Account?
The Undeposited Funds account is a temporary holding account for payments you've received but haven't deposited into your bank yet. Think of it like a virtual cash drawer or envelope—it holds checks, cash, or grouped payments until they're physically deposited together as one amount. This account helps you keep your books aligned with your bank when you combine multiple payments into a single bank deposit.
Note: The Undeposited Funds account is not a real bank account. It's a tracking account that groups payments before they appear on your bank statement.
Why It Matters
The Undeposited Funds account helps your accounting match what your bank actually shows.
Understanding this concept lets you:
Combine multiple payments into a single bank deposit
Match deposits in your books to deposits on your bank statement
Avoid reconciliation issues caused by mismatched deposits
Keep income reports accurate while deposits are pending
Without using an Undeposited Funds account, your books may show multiple deposits when your bank shows only one—making reconciliation harder and more time-consuming.
Example
You're a freelance graphic designer. On Monday, you complete three projects and receive payment:
$500 cash from Client A
$300 check from Client B
$200 check from Client C
You record all three payments to Undeposited Funds. On Wednesday, you take all the cash and checks to the bank and make one $1,000 deposit.
Without Undeposited Funds:
Your books show: Three separate $500, $300, and $200 deposits
Your bank shows: One $1,000 deposit
Result: Nothing matches—reconciliation becomes confusing
With Undeposited Funds:
Your books show: $1,000 moved from Undeposited Funds to Business Checking
Your bank shows: One $1,000 deposit
Result: Perfect match—reconciliation takes seconds
Where to Find It in Quicken Business & Personal
The Undeposited Funds account is created automatically the first time you choose it as a deposit destination when recording a payment or sales receipt. You can also create it manually.
Once created, you'll find it:
In your Accounts list in the left sidebar under Business Payments
As a deposit option when recording invoice payments
As a deposit option when creating sales receipts
In your Balance Sheet report under Assets