UDF is the cash you’ve collected but haven’t parked in your bank yet—think online payments or checks in limbo (like in Amazon). If you don’t track this, your books turn into a mess, and your cash flow numbers won’t be accurate. Get UDF right, and your financials stay clean, your reconciliations are smooth, and you know exactly what’s in your pocket, and what will be in your pocket in the next couple of weeks.
This is a really important component of your cash flow statements and of your cash flow forecasting and ecommerce accounting in general. Stay on top of undeposited funds to keep your money straight and your business humming.