Undeposited funds is a holding account in QuickBooks Online for payments you've received but not yet recorded as a bank deposit. Intuit says to use it when you deposit more than one payment at a time, when your bank isn't connected, or when invoice payments aren't processed through QuickBooks Payments. You choose it in the Deposit to field on a received payment, then combine the payments in a bank deposit that matches the amount the bank shows. A processor's fee goes on the deposit as a negative amount. Some companies see the account as Payments to deposit. Find it by its detail type, Undeposited Funds.
What is undeposited funds?
It is a holding account. When you record a customer's payment in QuickBooks Online, you choose where it goes in the Deposit to field. Choosing undeposited funds holds the payment there. When the money arrives in the bank, you record a bank deposit that pulls in the held payments, and the account empties. Intuit says all payments in the undeposited funds account automatically appear in the Bank Deposit window.
Is it the same as payments to deposit?
Yes, in practice. Intuit's article on adding a deposit to an invoice tells you to choose "Payments to deposit or Undeposited funds" from the Deposit to menu, depending on how your company labels it. The account can be renamed, so Intuit says to check the Detail type column for "Undeposited Funds" in the chart of accounts.
When should you use undeposited funds?
Intuit lists three cases:
- You deposit more than one payment at a time at your bank.
- Your bank isn't connected to QuickBooks.
- Invoice payments aren't processed through QuickBooks Payments. Intuit says QuickBooks takes care of payments processed with QuickBooks Payments for you.
Payments collected through Stripe or another outside processor fit the first case. One Stripe payout settles a batch of payments, refunds and fees, so one bank deposit covers many customer payments.
How do you clear undeposited funds?
- Record each customer payment with Receive payment and choose undeposited funds as the Deposit to account.
- When the payout reaches the bank, create a Bank Deposit.
- Tick the payments the payout covers.
- Enter the processor's fee as a negative amount in "Add other funds to this deposit", coded to your bank or merchant fees expense account.
- Check that the deposit total equals the amount the bank received, then save.
A worked example: three plan payments of $1,108.33 are paid by card into Denver LLC's Stripe account. At Stripe's standard US card price of 2.9% + 30¢, each carries a $32.44 fee, so Stripe pays out $3,227.67. The deposit holds the three payments ($3,324.99) and a fee line of −$97.32. The total matches the bank. Stripe's payout reconciliation report lists which payments and fees each payout includes.
Why is undeposited funds growing?
Usually because payments were recorded but never grouped into a deposit, or a bank feed transaction was added as new income instead of matched. Both leave the payment counted twice: once in undeposited funds, once in the bank. Before month end, every item in it should be either in a deposit or explained. See month-end close.
What changes with several entities?
Each entity has its own QuickBooks company and its own undeposited funds. Phoenix's payments are held in Phoenix's company and cleared against Phoenix's bank deposits. If one payment account pays out for several entities, each payout must be split before it can be deposited, which is why each entity usually has its own Stripe account. See the post on reconciling Stripe payouts per location.
General information, not accounting advice.
- QuickBooks: Deposit payments into the Undeposited Funds account in QuickBooks Online
- QuickBooks: Add a deposit to an invoice
- QuickBooks: Enter a bank service fee while using a third-party merchant service
- Stripe: Payout reconciliation report
- Stripe: Pricing
Every figure on this page was checked against these sources on Oct 21, 2026. General information, not legal or tax advice.