Undeposited Funds

This is a process that allows Aplos customers to post income when received, but to also ensure their register deposits line up with actual bank deposits.

Currently in Aplos, each invoice from accounts receivable is posted as a separate deposit into the cash account you chose for that invoice. Each contribution batch is also its own deposit. So what happens if you receive two invoices and contributions, and take them to the bank at the same time?

Undeposited funds are the solution. Start by going to your accounts list in Aplos, then to the asset section where you will create an asset account called “Undeposited Funds”. Make sure to mark this account as a “register” type account (For more details on the chart of account page in Aplos and making changes, feel free to reference this article).

Using your Undeposited Funds Account:

Now that this is created, you will use this register as the place to receive accounts receivable invoices, post contribution deposits, as well as other income you may receive. The Undeposited Funds account works as an intermediary catch-all account that holds the records of all money received.

Let’s say you go to the bank and deposit $1,500. This $1,500 is actually comprised of two invoices for $250 each, as well as a $1,000 contribution batch. In Aplos, you will post the receipt of these invoices and the contribution batch into the Undeposited Funds account. Now, instead of showing as three deposits in Checking, it shows as three deposits in Undeposited Funds.

Next, record a deposit in Checking for $1,500, but for the account used in Undeposited Funds. This posts a “transfer” from Undeposited Funds to Checking, thus reducing the balance of Undeposited Funds to $0 and putting the money into Checking, where it was deposited. Because there was only one deposit posted into Checking, it will line up with your bank statement, making the bank reconciliation easier to complete.

Undeposited Funds acts as a clearing account that can hold the detail of the individual transactions / deposits. Again, you can use this for any and all income, but it will most commonly be used when you are depositing money into a bank account that is made up of multiple contribution batches and/or accounts receivable receipts.

This solution can also be used when recording income that spans multiple periods, in order to help you bridge the gap between cash and accrual accounting. For example, let’s say you received plenty of year end donations that need to be counted for the previous year (2017), but they weren’t deposited until this year (2018). If you use the Undeposited Funds process, you can post the income when it is received into the Undeposited Funds account for the previous year, even though you won’t post the actual deposit until the following calendar year.

Note: Your Undeposited Funds account might indicate you have more money than you think, and this is the result of a balance that you received but haven’t taken to the bank yet. This provides an idea of how money that is recorded and attributed to the proper period might not reflect the actual amounts you have in your possession.

Using an Undeposited Funds Account for Aplos Integrations:

The last application for Undeposited Funds is if you use a Donor Management integration with Aplos, like CCB or Bloomerang. With these integrations, the records are sent to Aplos whenever you post them to the other system. Most often we see customers post entries into their Donor Management platform when received. If that is the case, that is the same cadence that will get pulled in to Aplos, which is likely not the same as when you actually when to the bank and made a deposit.

By using Undeposited Funds, you can have these amounts flow into the Undeposited Funds account, then post the deposits into Checking. This would make Undeposited Funds the account that holds individual records, while allowing you to keep your bank record consistent with the deposits you make.

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