To import deposits into QuickBooks Desktop without doubling income, first group the customer payments already sitting in Undeposited Funds with Make Deposits, so each bank deposit has a matching record. Then import the bank file and match each deposit line to that record. Add as new only deposits with no sale behind them, such as interest.
Why imported deposits double income in QuickBooks Desktop
Income doubles when the same money is recorded twice: once when you receive a customer's payment against an invoice or sales receipt, and again when the bank file's deposit line is added as new income. Each entry looks reasonable on its own. Together they report the sale twice and leave a payment stranded in Undeposited Funds.
The pattern is easy to fall into. A customer pays invoice 1187 for 640.00, and you record it in Receive Payments. QuickBooks puts that payment in Undeposited Funds by default. A few days later the bank file brings in "DEPOSIT 640.00", and on the review screen you choose to add it, coding it to Sales. Sales now shows 1,280.00 for a 640.00 job, and Undeposited Funds still holds the original payment, waiting for a deposit that will never come.
Signs it has already happened
Three reports give it away:
- Profit and Loss shows income noticeably higher than the bank deposits for the same period.
- Undeposited Funds, opened as a register from the chart of accounts, holds payments that are weeks or months old.
- The bank reconciliation ties, because the bank side is right, while the income side is inflated. That is why the problem can go unnoticed for a long time.
If you see all three, the fix is to delete the deposits that were added as new income and replace them with proper deposits from Undeposited Funds, as described in the sections below.
How does Undeposited Funds line up with a bank deposit?
Undeposited Funds is a holding account. Intuit's article on what the Undeposited Funds account is describes it as the place for invoice payments and sales receipts you want to combine before taking them to the bank. A later bank deposit in QuickBooks groups them, so the books show the same single total the bank shows.
Banks see deposits, not invoices. If you take three customer checks to the branch on Friday, the statement shows one line for the sum of all three. QuickBooks needs a record of each check, because each one pays a different invoice. Undeposited Funds bridges the two views: the three payments wait there, and one Make Deposits entry moves them into the checking account as a single total.
What Make Deposits does
In QuickBooks Desktop, Banking > Make Deposits opens a list of everything waiting in Undeposited Funds. You tick the payments that went to the bank together, choose the bank account and the deposit date, and save. The register then shows one deposit for the combined amount, which is exactly what the imported bank line will say.
When the holding step is skipped
Payments can be set to go straight into a bank account instead of Undeposited Funds. That suits a business where every payment arrives as its own bank line, such as a single ACH payment per invoice. It does not suit one where checks or card sales are batched. Choose one habit per bank account and keep it, because a mix of the two is where most deposit doubles start.
Matching a downloaded deposit to a Make Deposits entry
Matching tells QuickBooks Desktop that a deposit line from the bank file is the same money as a deposit you already recorded. The line is then marked as matched instead of being added again. This works only if the Make Deposits entry exists before you review the import, with the bank's amount and a nearby date.
A step list for one week of deposits
- Open Banking > Make Deposits and record each bank deposit for the week from the payments in Undeposited Funds.
- Download or convert the bank file and import it with File > Utilities > Import > Web Connect Files.
- Choose the existing bank account when QuickBooks asks where the transactions belong.
- Open the Bank Feeds Center and review the deposit lines.
- For each deposit that QuickBooks pairs with a Make Deposits entry, confirm the match.
- For a deposit with no partner, check Undeposited Funds before you add it as new.
- Open the register and confirm each deposit shows as matched, with nothing doubled.
A worked example
The table uses made-up figures for one example week. The left columns are the bank deposits in the file. The right columns show what is in QuickBooks and what to do.
| Bank date | Bank deposit | Already in QuickBooks | Action |
|---|---|---|---|
| Mar 3 | 1,415.00 | Payments of 640.00, 525.00 and 250.00 in Undeposited Funds | Make one deposit of 1,415.00, then match |
| Mar 4 | 2.18 | Nothing | Add as new, coded to interest income |
| Mar 5 | 980.00 | Sales receipt of 980.00 in Undeposited Funds | Make a deposit of 980.00, then match |
| Mar 6 | 5,000.00 | Nothing | Add as new, coded to owner contribution |
| Mar 7 | 311.40 | Card sales of 325.00 in Undeposited Funds | Deposit 325.00 with a 13.60 fee line, then match |
Every income line traces back to one sale record, and every bank line ends matched or deliberately added. The Mar 7 line is the subject of its own section further down.
When the download refuses to come back
The bank file can only be imported once into a company file. The Intuit guide to downloading bank feed transactions in QuickBooks Desktop states that you cannot download transactions into the same company file more than once, and that deleted downloaded transactions cannot be downloaded again. So fix a wrong match by editing the deposit, not by deleting the downloaded line.
Which bank deposits should be added as new in Desktop?
A deposit should be added as new only when nothing else in QuickBooks Desktop already records the money. Interest, a vendor refund, a loan advance, a tax refund and money the owner puts in all qualify, because none of them follows an invoice or sales receipt. Everything that pays a customer's bill should be matched instead.
Each of these needs a different account, and getting the account right matters more than the speed of the review:
- Bank interest goes to an interest income account.
- A refund from a supplier goes back to the expense account the original purchase used, which lowers that cost.
- A loan advance goes to the loan's liability account, not to income.
- Owner money goes to an equity account, such as owner contributions or capital.
- A transfer from another of your accounts is a transfer, not a deposit at all.
A quick test
Before you add any deposit, ask one question: did someone pay us for something we sold? If yes, look for the payment in Undeposited Funds or against an open invoice. If no, add the deposit and pick the account that matches its source. A deposit that passes the test but has no payment record behind it usually means a payment was never entered. Enter it with Receive Payments first, deposit it, then match.
Card processor deposits that arrive net of fees
A card processor usually pays out the day's sales minus its fee, so the bank deposit is smaller than the payments waiting in Undeposited Funds. QuickBooks Desktop handles this in Make Deposits: select the full payments, then add a negative line for the fee to a bank or merchant fees expense account. The deposit total then equals the bank line.
Using the Mar 7 example from the table: card sales of 325.00 sit in Undeposited Funds, and the bank shows 311.40. In Make Deposits, tick the 325.00 of sales, then on the first empty line below choose the merchant fees account and enter -13.60. The deposit saves at 311.40, matches the bank line, and the fee is booked as a cost instead of disappearing.
Why not record the net amount as income?
Recording 311.40 as the sale would understate both income and expenses by 13.60. Profit comes out the same, but sales tax reports and gross margin figures would be wrong, and customer records would show less than they paid. Booking gross and fee separately keeps every figure honest.
Processors that pay out in batches
Some processors combine several days into one payout, or hold back a reserve. The method still works: tick every payment the payout covers and add one fee line for the difference. A payout report from the processor shows which sales went into it. Stripe payouts follow the same pattern in Desktop, and importing Stripe payouts into QuickBooks Desktop covers the payout report in detail.
Credit card accounts have their own version of this problem in reverse, with refunds and payments that look like deposits. That side is covered in downloading credit card transactions into QuickBooks Desktop.
Stale Undeposited Funds balances before a deposit import
Old payments left in Undeposited Funds cause trouble during a deposit import, because QuickBooks Desktop may offer them as matches for new bank lines of the same amount. A 500.00 payment from last October can end up paired with a 500.00 deposit from March. Clear the old items before you import, so only current payments are candidates.
Find out what is sitting there
Open the chart of accounts and double-click Undeposited Funds to see its register. Sort by date. Anything older than a few weeks needs an explanation. The usual causes are:
- A payment that was really deposited, but the deposit was added as new income from a bank file. The fix is to delete that added deposit and make a proper one from Undeposited Funds instead.
- A payment recorded twice, perhaps once from a sales receipt and once from Receive Payments. Delete the duplicate.
- A payment that never reached the bank, such as a lost check. Void or reverse it, and reopen the invoice.
Fixing a past period carefully
If the stale items fall in a period you already reconciled or filed taxes for, talk to whoever prepares your returns before changing anything. Altering a closed month can change reports that were already sent. For older months that were never entered at all, importing old bank statements into QuickBooks Desktop explains how to fill the gap in date order.
Mind the date window
A bank's Web Connect download covers only a limited span of history, so a clean-up that spans months may need statements as well as downloads. The QuickBooks Desktop Web Connect date range sets out how far back a download usually reaches and what to do beyond it.
When those older months exist only as PDF statements, SimpleBankConvert is being built to turn each PDF into a QBO file that Desktop opens like any bank download, with deposits and withdrawals in a single amount column. If part of the business is kept in Xero instead, the same PDF route is described in importing a PDF bank statement into Xero.