5 Biggest Bookkeeping Mistakes Fixed: Part Five
Not using Undeposited Funds Correctly
If you are like most businesses, you deposit more than one check at a time. The way QuickBooks handles this is with a special account called Undeposited Funds, which I think of as the drawer in your desk where you put checks until you deposit them. It might be that you make a deposit every day, but even then, throughout the day, when checks or cash comes in from customers, you put them in your drawer until you make that deposit. Some people make the mistake of receiving customer payments and telling QuickBooks that each customer payment went straight to the bank instead of going to Undeposited Funds. Then, when they go to reconcile their bank account, they have to waste a lot of time matching up the 15 customer checks in QuickBooks that make up a single deposit on their bank statement. Even worse, QuickBooks doesn’t know which checks make up a deposit if you don’t tell it this information, so you can end up Adding transactions from the Bank Feeds instead of Matching them with a deposit that’s already on your books. This essentially doubles these transactions, which requires more of your time to fix.