QB Issue Resolution:

You can use a clearing account so that your Undeposited account register will be balanced. To create a new account follow the steps below:

 

  1. Go to the Accounting tab, then select Charts of Accounts.
  2. Click the New button on the top right corner of the section.
  3. Choose the Account Type as Bank and the Detail Type as Cash on Hand.
  4. Enter other necessary details.
  5. Verify and then hit Save and Close.

 

Then to transfer the register to your Clearing account, do the following steps below:

 

  1. Go to the Accounting tab, then select the Charts of Accounts.
  2. Click on the View Register along the Undeposited Funds.
  3. Click on the transaction and select the Edit button.
  4. Change the Deposit to box to Clearing Account.
  5. Hit Save and close.

 

I added a screenshot for your reference.

 

 

For future reference, check out this article: Match and categorize bank transactions in QuickBooks Online.

 

Just click the Reply button if you need further assistance. I’m here to assist you right away. Have a good one.

Resolution for Issue 'I have a client that used Quickbooks Online for invoicing purposes only at the beginning. Then connected account later on. But now the Undeposited Funds balance is huge from all the payments received on invoices prior to connecting bank account and matching to deposits. Is there a way for me to reconcile/clear those payments?' available: Yes (Solved).
Source: Intuit Community forum.

I have a client that used Quickbooks Online for invoicing purposes only at the beginning. Then connected account later on. But now the Undeposited Funds balance is huge from all the payments received on invoices prior to connecting bank account and matching to deposits. Is there a way for me to reconcile/clear those payments?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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