Undeposited Funds

The undeposited funds account is used as a temporary holding account for money that has been received but not yet deposited to the bank. This account ensures accurate tracking and recording of all incoming funds before they are consolidated into a bank deposit. Once configured, the undeposited funds account populates the Undeposited Funds field on the Bank Deposit record and is used to match undeposited funds in Bank Activity.

Here's how it typically works:

1. A payment is received and recorded in R365. Instead of directly depositing it into a bank account, it goes into the undeposited funds account.

2. The undeposited funds account serves as a placeholder, allowing the organization to track payments received but not yet deposited.
   This is particularly useful for businesses that receive multiple payments throughout the day and make a single bank deposit at the end of the day.

3. When ready to deposit the funds into the bank, the deposit is recorded in R365. To do this, the users selects payments from the undeposited funds account to move into the appropriate bank account.

4. By using the undeposited funds account, the user ensures that the deposit amounts match the amounts on the bank statements, simplifying the bank reconciliation process.

Once deposited, the transaction is marked as excluded on the Undeposited Funds report, even if the Bank Deposit record is deleted.

Set the Undeposited Funds Account

1. In the top ribbon menu, hover over the Administration option and select Preferences.

2. Select the Accounts tab.

3. From the Undeposited Funds drop-down, select the default GL account that will temporarily house funds that have been received but not deposited to the bank.

4. In the top left of the System Preferences page, select Save to save this setting.