When you record an offline payment due to a cash or check payment, it is generally encouraged that those offline payments are linked to a deposit once the deposit clears the bank. In the meantime, Undeposited Funds exists as a holding asset account for those funds.
When an offline payment is made, Accounts Receivable is reduced by the amount of the payment (or Accounts Receivable - Prepaids is increased if the payment is a prepayment) and Undeposited Funds are increased. Once the payment is linked to a deposit, PayHOA will automatically transfer the amount of the payment from Undeposited Funds to your PayHOA bank asset.
Accounting V2: What are Undeposited Funds (Accrual Accounting)
An overview of the Undeposited Funds Asset Account
Written by Mitzi Rivera
Updated over 3 weeks ago