One of my most dreaded functions and account of QuickBooks. The undeposited funds account. It is so easy to not utilize this account properly. I had a client recently that had about $10K of revenue that was double booked because the undeposited funds account was not set up properly. Not all the revenues were getting double booked, only electronic payments. This made the undeposited funds account look like it was functioning properly and there was only about $100 outstanding in the account. It was easy to find the invoice payments and 0 out the undeposited funds account.
The double booking of revenue however, whew, let me tell you, what a mess to sort out. Totally worth it since it was going to save the client about $4K in taxes, but what a time sync! Does your undeposited funds account show a balance that it shouldn’t? This account should zero out after deposits have cleared the bank. If you have a large balance in this account and it keeps increasing, you are probably double-booking revenue, which means you could be overpaying in taxes. Want to learn more? Book a free consultation with me to discover if your undeposited funds account is being used properly.