Barbara writes:
I recently downloaded all of my customer's information into QB from my online merchant account. This recorded all of the customer payments, and put them into an account called Undeposited Funds. My merchant account automatically deducts the fees, so I end up with a net amount.
Since I've been very good about reconciling my bank accounts in QB, I do not know what to do with this money. How do I clear out Undeposited Funds without changing the reconciled deposits?
My reply:
Although my answer will be long and may seem complex, the idea is simple: we will 'swap' the old information in the Make Deposits screen for the new, correct information. I assume that the Sales information (ie, Sales Receipts or Invoices) is already correct, so I won't address that here. If that information is not correct, it needs to be before proceding.
First, you will need to know which customer payments went into each of the reconciled bank deposits. For example, you may have had several customer payments lumped together, like this:
$27.87 less $3.21 fees, equals a net amount of $24.66
$158.24 less $8.98 fees, equals a net amount of $149.26
$69.45 less $5.64 fees, equals a net amount of $63.81
$241.21 less $11.57 fees, equals a net amount of $229.64
Total of customer payments: $496.77
Total bank deposit based on net amounts above: $467.37
It's important to print this level of detail for each bank deposit, and to have it in front of you while working. The merchant account should have this available online. Also, copies of deposit slips can be used if they show the customer name and amount of payment. Or, your bank may a copy of the deposit slip available online. Somehow, this information needs to be determined in order for these instructions to work correctly.
Once you have the above information, open QB and navigate to the Make Deposits window. If the Payments to Deposit window opens, close it. You should now be at the regular Make Deposits window.
Scroll through the deposits until you find the first one that you wish to fix. I recommend working in chronological order, starting with the least recent deposit and moving forward one by one. Once at the first deposit, make a note of the total. Click the Payments button at the top of the window. The Payments to Deposit window should open. Scroll through this list and select all of the customer payments that make up this particular deposit. Click ok.
QB now places these payments into the Make Deposits window, adding them to the deposit information already there. Delete any of the old information by clicking on each line, and pressing Control-Delete. Do this for all old information. What remains should only be the customer payments you just selected.
Tab to the next empty line. In the Received From field, enter the name of the merchant company. In the Account field, select an expense account called Merchant Fees (if you don't have one, create it now). You can enter a memo if you wish. Tab over to the Amount column. Enter, as a negative amount, the difference between the deposit as it is currently shown in QB in the lower right hand corner, and the deposit as it showed before you altered it. This should be the exact amount of the merchant fees that were deducted from the merchant company. Save the transaction.
As you can see, we fooled QB by only changing the deposit details, not the deposit total.
Caveat #1: if the amount of the 'new' deposit is different at all from the 'old' one, QB will allow you to save the transaction, but will quietly remind you that it's already been reconciled. And QB will consider this deposit as unreconciled and it will appear in the reconciliation screen next time you reconcile the bank statement.
Cavaet #2: I've noticed that in certain versions or years of QB I still get this 'you're altering a reconciled deposit' reminder even when the deposit amount is the same. Unfortunately, I can't remember which versions or years of QB do this.
I also noticed that, when I got this reminder, QB considered the deposit unreconciled. It altered the Opening Balance in the next reconciliation, and the deposit appeared in the reconcilation screen next time I reconciled the bank statement. The good news is that, if this happens to you, ignore the difference in the Opening Balance, and simply click the deposit to re-reconcile it. Reconcile the remaining transactions as you would normally and the rec should go fine.
