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Quickbooks Undeposited Funds Error - Uncleared Deposits

Posted on 2007-04-01
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I have a situation with Quickbooks known as the "undeposited funds error." I would like to straighten this out, but when I tried to go to the web page I had bookmarked quite a while ago which gives the procedure to fix the problem, the page is no longer on line.

In addition to my bookmark, I have found several references online to the article. The references follow:

The URL is http://accountant.intuit.com/colleagues/product_tips/private/tip_jw_mastertipcorrectingerrorsassociatedwithundepositedfunds.cfm?y=1242j7k319t617e.

Another link that is still on line to the same article is https://accountant.intuit.com/colleagues/product_tips/private/tip_jw_mastertipcorrectingerrorsassociatedwithundepositedfunds.cfm

Yet another variation is http://www.cfsatlanta.com/Undeposited%20Funds%20is%20a%20clearing%20account%20(current%20asset),%20created%20by%20QuickBooks%20to%20track%20receipts%20from%20customers%20that%20are%20applied%20to%20Accounts%20Receivable%20but%20are%20not%20yet%20deposited%20at%20the%20bank.%20When%20clients%20receive%20payments%20from%20customers%20(using%20either%20the%20Sa

What I would like to do is find this article, or alternatively, find the explanation for how to perform the following procedure:

1. When capturing credit card  transactions, the debits have been made to the Undeposited Funds account.

2. The normal use of Quickbooks involves the Make Deposit function to transfer the debit to a Cash in Bank account. However, because we have been recording the deposits separately through the General Ledger, the Deposits are stuck in the database.

3. The unavailable article cited above describes this situation and gives a procedure to fix it, thereby clearing out the Deposits.

I would like the procedure because I have several years of data now with uncleared Deposits.
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Question by:jasimon9
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Expert Comment

by:md501
ID: 18851985
One way to clear undeposited funds is to "make deposit" all payments into another asset account (credit card pmts) instead of your bank account.  Then make a j/e crediting this account from whatever account you credit in your daily deposit j/e.

On an ongoing basis instead of depositing your payments into the undeposited account change it to the credit card pmts asset account.  Then when you make daily deposits your j/e would look like this

                     debit     credit
bank               x  
cc pmts                        x
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Author Comment

by:jasimon9
ID: 18852212
Actually that suggestion gives me an idea. It seems your idea is what I had intended to be doing -- using undeposited funds as the clearing account. The problem with using undeposited funds account is that it automatically sets up the deposit. So just use a different account and that will no longer occur. Go forward, that would be a solution.

But I would like to clear all the deposits too. The idea you gave me is to set up a dummy bank account. Use make deposit to deposit everything into that account. Then close that account against undeposited funds.

Not sure this would work. Your thoughts?
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Expert Comment

by:md501
ID: 18853238
I would make the dummy account an other current asset account type.  That is the type of account the undeposited funds account is.  You can make deposits into a bank, A/R, or other current asset account.  

In order to clear the deposits account, you would have to click "make deposits" then select all payments and deposit to the dummy account.  This clears the undep funds account.  After this you need to make a j/e crediting the new asset account and debiting some other account.  

The question I have is, when you make your j/e deposits what account do you credit?  Is it the undep. funds account?  
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Author Comment

by:jasimon9
ID: 18853435
It would have to be the undeposited funds, because our undeposited funds it already being cleared by the bank interface. So essentially it is already at a zero balance. The entry to make the dummy deposites would put a large credit it in, which would then simply be cleared against the dummy bank account.

Anyway, that is what I am thinking.
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Expert Comment

by:md501
ID: 18853560
Correct.  When you "make deposits" into the dummy account, it will create a large credit in the undep. funds account.  Then you will make a j/e crediting the dummy account and debiting the undep. funds account.  This will make both accounts zero.  Then going forward just continue depositing your payments into the dummy account and credit this account when you make daily deposits to your bank account.
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Author Comment

by:jasimon9
ID: 18854115
I am going to try this. Points if it works.
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Author Comment

by:jasimon9
ID: 18868322
I tried to perform the above procedure, but something is not right. I tried to do all the deposits within one fiscal year, and I got the error message shown below:

"The transaction is not in balance. Make sure the amounts in the detail area of the form for this transaction equal the amount at the top of the form."

One part of the problem is that on the Make Deposits window, there is no "amount at the top of the form", so I don't know what this message is trying to tell me.

I went ahead and did the same procedure for only one line and it worked. But I want to do them all for the year at once.

Any ideas?

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Author Comment

by:jasimon9
ID: 18868354
I might have a solution.

Based upon an article "Troubleshooting Undeposited Funds" by Joe Woodard, he points out that an entry should be made at the end of the JE created by make deposits. While this was not exactly applicable in my case, I noticed that there were predominently "negative" deposit amounts. This looked strange, so I added a line to balance the negative portion, which was shown as the Sub-Total.

I posted the offset amount to suspense. The the deposit posted, and made the entries to the expected accounts, and the final clearing entry was obvious.

If this works for the rest of the years, then I will have my solution, as combined from your help here plus the referenced article.
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Author Comment

by:jasimon9
ID: 18868363
Unfortunately, whille the above procedure allows the deposit to post, it puts the funds right back in the undeposited funds account. Thus another JE is needed to clear, and in the make deposits window, there is a "deposit" showing that is the total amount.

So I am back to the original problem of having left over "make deposits" entries.

If nothing else, at least I can collapse all those entries for each year to a single line. An maybe just forget about them. The GL trial balance is perfect.
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Author Comment

by:jasimon9
ID: 18868395
well I have done 2 years, and collapsed lots of left over "deposits" into a single line.

I don't think that gets me anywhere. I am probaby just going to ignore them and move forward from this point.
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Accepted Solution

by:
md501 earned 500 total points
ID: 18869668
I tested this in a sample account and it worked:

1. Daily deposit j/e debit bank account, credit undep funds.

2. "Make Deposits" into dummy account.

3. j/e debit undep funds, credit dummy acct.

4. "Make Deposits" --should be positive and negative amounts from j/e's--select both so deposit equals zero--select dummy acct. to deposit into--save and close.

You have to do these 4 steps in order for it to work.
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Author Comment

by:jasimon9
ID: 18992737
I have had a major distraction recently and have not been able to get back to this issue. Over the next few days I am hoping to be able to get back to this, to try the lastest suggestion from md501.
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Author Comment

by:jasimon9
ID: 19154161
Still coping with Major Distractions. But will be working on accounting this week. Probably will want to assign points amongst the contributors.
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Author Comment

by:jasimon9
ID: 19235442
I have just finished all the distractions, and should be actually trying these solutions very soon!
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Author Comment

by:jasimon9
ID: 19316884
I will be trying the solution suggested by md501 on 04/07/2007 in the next couple of days.
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Author Comment

by:jasimon9
ID: 19327715
I have tried to follow the procedure, but something is amiss and I cannot perform the steps. While the steps seem to make sense, one aspect of my issue is out of whack.

Here are the steps as far as I was able to follow them, with my notes:

1. Daily deposit j/e debit bank account, credit undep funds.
     - I created a j/e for one of the lump sums still showing in Make Deposits. However, these lump sums show with a minus in front of them, and I am confused by that.

2. "Make Deposits" into dummy account.
    - I tried to set up a dummy account as Other Assets, but that account did not show up in the dropdown, even though other "Other Assets" accounts did. So I went ahead and changed the type to Bank.
    - However, I cannot use the Make Deposits function. I have selected the new entry I just created, which shows with a minus in front. When I try to do so, QB says the deposit is not in balance. I am thinking this is because of the minus. I does not want you to make a minus amount, which in effect would be a withdrawal.
    - I am thinking this might be the root of the problem. Not only are there a ton of entries left over in "Make Deposits", they are negative.

3. j/e debit undep funds, credit dummy acct.
    - could not get past step 2, so was not able to do this step

4. "Make Deposits" --should be positive and negative amounts from j/e's--select both so deposit equals zero--select dummy acct. to deposit into--save and close.
    - could not get past step 2, so was not able to do this step

I am wondering if this is useless. If so, I would consider just starting a new company file for 2007 and forgetting about having everything in one file.
0
 

Author Comment

by:jasimon9
ID: 19328168
After I posted the above response, I looked again at the materials from Joe Woodard. His instructions mainly have to do with having an undesirable balance in Undepositied Fund due to making a j/e for deposits rather than using the Make Deposits function.

However, his explanation gave me an idea. Rather than try to do this year-by-year, just try to do a single "make deposits" transaction for whatever is in there, to find out the net balance.

Turns out the net balance of all the accounts is very close to zero. In fact, by omitting one item which was a reveral of an AJE to clear undeposited funds at year end (we are on a cash basis), plus one other deposit, I can get a net zero amount for everything else, which includes thousands of lines.

So I am going to try and execute "Make Deposits" for that zero amount. Since it is such a huge number of line items, it appears that QB is choking on it -- that is, it has been running for about 10 minutes now.

If this does not finish, I plan to revert to my most recent backup and try it again.

I'll let you know the results.

0
 

Author Comment

by:jasimon9
ID: 19328470
So I tried to execute "Make Deposits" for that zero amount, by simply omitting the two lines. Since it is such a huge number of line items, it took nearly a half-hour on my fast machine. During that time the QBI file grew to over 100MB, and the QBW file grew from 25 to 35MB.
 
So other than clearing the Make Deposits window, it does not appear that I have accomplished much except to generate thousands of lines of postings.
 
I believe I will chose some kind of Archive and Compress options to clear up this mess. There are some class reports that I need the detail for, so I will have to come up with some kind of a game plan to accomodate those.
 
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Author Comment

by:jasimon9
ID: 19328484
At this point, I am going to award points for the contribution, even though my problem was solved in a different way.

btw, the giant Make Deposits still is not perfect, because of year to year cross-over. In prior years, the Undeposit Funds amount is huge. The only way to fix that would have been to do year-by-year, as I originally wanted to. But the deposits don't net out year by year. So that is too big of a mess at this point.
0
 

Author Comment

by:jasimon9
ID: 19349767
I have just reached the "point of irony" that I had a feeling I was going to reach.

I was able to completely clear up the UFE issue by using a combination of Make Deposits and some additional JEs needed to clear some accounts to match historical trial balances. The "irony" is that I felt by the time I had finished the very tedious work of doing the Make Deposits on many thousands of lines, that I would come up with the "right way to do it." Sure enough, just as I was reaching that last five minutes of the process, it dawned on me what I could have done.

I could have simply gone into the UF account, and just changed the account to the Credit Cards in Transit account that I will be using in the future. The contents of "Make Deposits" would have simply disappeared, and the file size would have remained the same, rather than growning by 40% during this process . It would have been only a little more tedious to change all those many thousands of entries one by one.

Oh well, live and learn.
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Expert Comment

by:deed
ID: 20990066
Sweet reading!
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Author Comment

by:jasimon9
ID: 20990147
Thanks!
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