Undeposited Funds

What this does

1499 Undeposited Funds is the holding account between "the customer paid" and "the money is in the bank." With Hold payments in Undeposited Funds on (the default), every recorded payment debits it. When you post a deposit that matches the bank credit, the deposit moves the money from 1499 to the bank account. The bank register then shows exactly what the bank shows, which is what makes reconciliation work.

The cycle

Payment recorded → Dr 1499 / Cr Accounts Receivable. Deposit posted → Dr Bank / Cr 1499. Card payments taken online follow the same path automatically: the payment lands in 1499 when the customer pays, and the processor's payout drains it when the money arrives.

The deposit suggester under Accounting → Money In → Deposits lists what's sitting in 1499 as candidates for the next deposit, and refuses to post a deposit whose lines don't add up to the bank credit to the cent.

When to turn it off

A shop that takes only cash and walks it to the bank the same day can turn the switch off under Accounting → Settings and have payments debit the bank directly. Turn it off only if you'll never take card payments through the app; once card money is in the mix, the holding account is the only honest way to book the timing gap. The switch applies to payments recorded from that moment; nothing already posted moves.

What happens in the books

Undeposited Funds is an asset and counts as cash on the Cash Flow report, because the shop has been paid; the later deposit is cash moving to cash, not new income. If the account doesn't exist, the first posting creates it at 1499 or the next free code below.

Common problems

1499 keeps growing. Deposits aren't being posted. Someone needs to own the Deposits screen weekly.

A deposit won't post: "cents do not sum." The selected payments don't equal the bank credit. A fee, a refund, or a payment that isn't in this batch is the difference; use a split.

A payment was deleted but 1499 still shows it as available. Refresh; deleted payments are excluded from the pool. If it persists, the deletion happened before the current fix and needs a manual adjustment.