How to use Undeposited Funds in AR

Problem Details:

Receipts are not always deposited into the bank on the day they are received, however, they should be recorded on that day to update the AR Aging for each customer.  What is the best way to handle this issue?



The receipts can be posted to the customer account on the day they are received and posted into the bank on the day they are deposited by using the Undeposited Funds account. 

Firstly, in Accounts Receivables / Receive a Payment, select 'Undeposited Funds' as the 'Account Type'. 

Enter an account number for this Undeposited account and ensure that it is not a bank account or linked to any bank account. Post the receipt as per normal.  This updates the customer account.

To deposit the funds into the bank account, go to Cash Management / Deposits and click on 'Add'. In the Filter box, enter the bank account where the deposit is going into and the currency and click 'Continue'.  Leaving all the other fields blank will enable ALL the undeposited funds to be shown on the screen below.  It is possible to enter other fields to filter which undeposited amounts show up.

Select all the amounts that will make up the deposit to the bank, and click on Save.  This acts as a post button and the entry to remove the amounts from the undeposited account into the bank account is created.


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