How to Reconcile Undeposited Funds in QuickBooks Online

Published September 28, 2026 · LedgerMedic

If you've gone looking for a way to reconcile Undeposited Funds the same way you reconcile a bank account, and come up empty, that's not a setting you're missing. QuickBooks Online's Reconcile tool only works on bank and credit card type accounts, tied to a statement. Undeposited Funds is classified as an Other Current Asset, so it never appears in that menu at all, and there's no bank statement to check it against. That's exactly why it quietly drifts for months at a time: nothing in QuickBooks forces you to look at it the way it forces you to look at a checking account. Reconciling it means building the check yourself.

What "reconciled" actually means for this account

A bank reconciliation confirms that QuickBooks agrees with an outside statement. Undeposited Funds has no outside statement, so instead you're confirming something narrower but just as important: that every open item in the account genuinely represents money received but not yet grouped into a deposit, and nothing else. No stale entries, no orphaned lines, no balance that's drifted away from what the register actually shows.

The manual process, monthly

1. Run the account's own QuickReport (open Undeposited Funds from the Chart of Accounts, then Run Report, or use Account QuickReport) as of the last day of the period you're closing.
2. Every line remaining open should be "in transit," meaning the payment was received near the end of the period and simply hasn't been swept into a deposit yet. Compare these against your bank's actual deposit activity in the first few days of the following period, a genuine in-transit item should show up there shortly after.
3. Anything open longer than your normal deposit cycle (typically 5–7 business days for most businesses) is not in transit, it's stuck, and needs to be individually investigated rather than carried forward again.
4. Total the remaining open lines and compare that total to the Undeposited Funds balance on your balance sheet as of the same date. They should match exactly, the balance sheet number is nothing more than the sum of what's sitting open in this report. If they don't match, something bypassed the normal deposit workflow entirely, most often a journal entry posted directly to the Undeposited Funds account, which the QuickReport won't always surface the same way an itemized payment does.
5. For each stuck line, work the specific fix that applies: a duplicate (see fixing a duplicate deposit), a deposit that landed in the wrong bank account (see moving a deposit to the correct account), or a bank-feed match gone wrong (see how the bank feed creates unapplied payments).
6. Save the cleared QuickReport as a PDF or spreadsheet, dated, so next month's reconciliation starts from a known-clean baseline instead of re-examining every historical line all over again.
7. Put this on the same calendar cadence as your bank reconciliation, ideally the same day, same checklist. Nothing in QuickBooks will remind you to do this on its own, so it has to be a habit you build in rather than a feature you turn on.

How this differs from a cleanup

This is the ongoing, monthly version of the check. If you're looking at a balance that's been building for a year or more rather than a single clean period, that's a different job, see the Undeposited Funds cleanup checklist or, for a genuinely old backlog, clearing Undeposited Funds that have been sitting for months. Reconciling monthly going forward is what keeps you from needing either of those again.