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Undeposited Funds Mess

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Hi Guys, 

I've been freelancing for a few months now and need some help with a new client. I'm working on his 2017 write up to file taxes by September. However, I came across his UF account and it is a mess. Income is overstated because they are reporting to AR, UF and also to service income accounts. I would like some help clearing his Undeposited funds account, but have come into a road block as to how to go about it. His CPA never reconciled correctly, he just created year end JE lol. Now I must identify which payments were actually applied to the invoice and which are duplicates. This is difficult because I'm working on QBO and customer pay using Intuit Merchant Services, which should be easy because the payments are linked to the invoices. 

The way I was doing it [but questioned my process] is to open the Undeposited Fund report from the Balance Sheet and identify which deposit is split between the bank [checking account] to UF account. Open it and on the "Add funds" section apply the negative amount to AR. Is this correct? 

Do you have any tips on how to run through this process in an easy an efficient way? 

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Wow nothing worse than starting to do a client's bookkeeping that is messed up from the getgo. Hopefully you can get it all cleared up for them. Funny his CPA never reconciled correctly, you may want to bring this to the attention of your client so he can deal with that. Have you talked to your client about the mess you've found?

As for how to process all the Undeposited Funds, I'm not a bookkeeper myself so not quite sure what you would do. Hopefully someone with that skillset will chime in :)



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