QuickBooks Undeposited Funds Cleanup: Step-by-Step

Veronica Wasek explains what Undeposited Funds is in QuickBooks and why it often ends up filled with old transactions, causing duplicated income on an accrual basis. She contrasts the correct workflow—invoice, payment to Undeposited Funds, bank deposit, then match in the bank feed—with the common incorrect workflow where users add deposits as new income in bank feeds instead of matching. She outlines two cleanup options: fixing source transactions (most accurate but time-consuming and requires complete documentation) and the faster negative deposit method when source details are missing, noting bank accounts should be reconciled first. She demonstrates selecting old Undeposited Funds items in a bank deposit and adding an offsetting negative amount to the same income account so the deposit totals zero, clearing both Undeposited Funds and duplicated income. Complete QBO Cleanup System Learn about my step-by-step online course showing you how to clean up messy QBO files https://courses.5mbacademy.com/course... -------------------------- Chapters: 00:00 Undeposited Funds Problem 00:32 What Undeposited Funds Is 01:10 Symptoms Causes Solutions 01:59 Right vs Wrong Workflow 02:48 Two Cleanup Options 03:08 Fix Source Transactions 04:04 Negative Deposit Method 04:35 Negative Deposit Steps 05:00 Live QuickBooks Walkthrough 06:12 Results and Wrap Up 07:04 Next Steps Resources Subscribe: Never miss a new video! Subscribe here:    / @veronicawasekui   Join my Free Community: Get support, tips, and connect with 25,000+ bookkeepers in my free FaceBook community: https://bit.ly/fbgroupvw Join My Mailing List: Stay in the loop with my monthly news, free resources, webinars, and special course discounts when you join my mailing list: https://veronicawasek.kit.com/content Free resource: Use my Smart Review Checklist to spot problems fast and win more cleanup clients in only 15 minutes: https://bit.ly/5mb-smartreview Recommended Resource: Stop working for free & get paid to diagnose messy QuickBooks Online files with my QBO Paid Diagnostic Review System: https://bit.ly/5mb_diagnostic Learn with 5MB Academy: Transform your bookkeeping business with my step-by-step courses and resources at 5MB Academy: https://www.5mbacademy.com\ **Save 10% on all courses using discount code TENOFF at checkout** Recommended Apps & Partners: **Manage client communications and bookkeeping workflows with ease using the Double (formerly Keeper) app. Get 20% off the first 3 months by signing up with this link: https://doublehq.com/?via=veronicawasek Find all of my favorite tools and affiliate recommendations in one place: https://veronicawasek.com/recommended... Follow Me on Social Media: Facebook:   / veronicawasek   Instagram:   / veronicawasek   Disclaimer: The information in this video is for educational purposes only. It is not intended as legal, tax, or accounting advice. Please consult with a qualified professional for advice specific to your situation. Copyright: © 2026 Veronica Wasek – 5MB LLC. All rights reserved. **Disclosure: I may earn a small commission if you purchase through these links, at no extra cost to you. I only recommend tools and affiliate partners I trust. #VeronicaWasek, #5MBAcademy, #QuickBooksOnline, #QBOCleanup, #BookkeepingCleanup, #DiagnosticReview, #BookkeeperTips, #BookkeepingBusiness, #SmallBusinessAccounting