In my post on How to Record Payment Processing Fees I walked you through the process of recording those transactions. The Undeposited Funds account is affected as an incidental to this topic, because they payments you receive, where the processing fees are later deducted in the Make Deposits dialogue, clear through Undeposited Fnuds.
Julie recently wrote in on this post asking for help with Undeposited Funds, based on an issue that is apparently cropping up from trying to record similar transactions with payment processing fees involved.
The issue Julie is having is that she has a large negative balance in her undeposited funds account. I have no way of knowing for sure, how to troubleshoot this, without actually looking at Julie’s live data, but this video answer should give you some ideas about how to troubleshoot, and then fix undeposited funds.
Here are some other resources that will help you better understand how to work with the undeposited funds account in QuickBooks: