Bank Account and Undeposited Funds

What is Undeposited Funds and how does money get into and out of this account?

Solution

Undeposited Funds is the General Ledger code that all transactions the Point of Sale (POS) system uses unless the payment method is "Direct to Bank" or "Internet"

Each transaction from above is details below:

POS invoice 1 to Cash sale only terms account with payment received as EFTPOS: goes from Sales to Undeposited Funds

POS Invoice 2 to 20 after EOM terms account with payment received as EFTPOS: goes from Sales to Undeposited Funds

POS Invoice 3 to 20 after EOM terms charged to account: goes from Sales to Customer Control Account

Payment entered on POS to account received as EFTPOS: goes from Customer Control to Undeposited Funds

Payment entered on POS to account received as "Direct to Bank": goes from Customer Control to Bank

Non POS invoice 4 to Cash Sale only terms account with payment receives as EFTPOS: goes from Sales to Customer Control and then from Customer Control to Bank

Non POS invoice 5 to 20 after EOM terms charged to account goes: from Sales to Customer Control Account

Payment NOT entered on POS to account received as EFTPOS goes: from Customer Control to Bank

Payment NOT entered on POS to account received as "Direct to Bank" goes: from Customer Control to Bank

Recording

The POS transactions go to Undeposited Funds unless the payment method is Direct to Bank, whereas NON POS transactions get recorded directly in the bank, regardless if they are still waiting to be deposited.

This is a snapshot of the GL Codes before removing the POS drawer:

The Prepare Bank Deposit screen and the Undeposited Bankings Report will only show the items received by Non POS users to any method other than "Direct to Bank" until the POS drawer has been balanced.

 

Removing the drawer will still not enter anything in the Prepare Bank Deposit or the Undeposited Bankings Report and nothing will change in the financials either.

Only after completing the balancing of the Cash Drawer will the Software enter a journal on your financials to move the figures from Undeposited Funds to the Bank Account, regardless of the fact that the have not been deposited yet.  At this stage the items will also be listed on the Undeposited Bankings Report and show on the Prepare Bank Deposit Screen.

Following this example, you can see that the Undeposited Funds GL Code eventually reaches a zero balance, if there are no more transactions being entered. 

Consolidated Drawers

If you have more than one POS drawer AND you consolidate your drawers at the end of the day: the GL code set as Undeposited funds in the POS defaults of all the POS users MUST be the same if the drawer is consolidated, because consolidated drawers can only be balanced as ONE. Therefore, the cashup line that moves the amounts to the bank will show on only one of your Undeposited funds GL code, so you may need to add them all to get them reconciled if you use more than one.

You can check the setting opening the POS default on all POS computers: