You can send and receive payments in business with the help of QuickBooks software. The credit card payments are easily accepted while using this accounting software. Now, we are going to describe the steps to process and record ACH payments in QuickBooks Online. Before describing the steps, it is important to describe ACH payments in brief with its benefits and types.
Overview of ACH (Automated Clearing House) Payment
ACH installment is an electronic installment strategy that permits the exchange of funds. This technique is accessible for charge payments, coordinating stores, and other cash exchanges inside the QuickBooks program. This choice is faster, more secure, and more reasonable than elective installment strategies. Exchanging cash from one bank account to another is a brilliant option.
Types of ACH Payments
ACH payments are of two types, which include the following:
- ACH Debit: In this payment method, you can pull the funds from the bank accounts in an electronic medium. This method is mainly used to collect the payments from the clients in businesses.
- ACH Credit: This method can be used in paying money to employees, settling vendor bills, and making refunds. It is opposite to ACH debit. ACH credit is a payment method in which the funds can be pushed from one bank account to another.
Benefits of ACH Payments in QuickBooks
The essential benefits of ACH payments in QuickBooks Online are as follows:
- Convenience: The administrative burden and human errors are reduced in businesses with the help of this payment method. ACH payment is convenient for business. The recurring payments for regular invoices can be set up by the customer, which helps in decreasing the probability of missed payments.
- Speed: Speed is always a key while transferring money from one bank account to another. ACH payment can be processed in one or three days of business. The funds can be transferred quickly as compared to traditional check deposits. This type of payment method can improve the cash flow and pay invoices on time.
- Security: It reduces the risks of errors or stolen checks which provides security to businesses and their customers. ACH payment is a secure and safest method as compared to card payments. This payment method helps to protect against fraud and unauthorized transactions.
- Lower costs: ACH payment is the best option than credit and debit cards. The fees can be processed through credit cards in the range of 2.5 % to 3.5 % per transaction. The cost of the transaction of paper checks becomes higher due to time and labor expenses, which makes the ACH payment the least effective method.
Steps to Process ACH Payments in QuickBooks
The ACH payments can be processed in QB Online in several steps. These are as follows:
Step 1: Select Transactions for Receiving Payment
A bank transfer payment can be processed for an invoice or sales receipt in QBO. It can also be possible by entering the bank details of a customer for recurring sales receipt. The several steps that can be followed to process payment for an invoice or sales receipt. These are as follows:
- Click on the Create icon and select sales receipt or receive payment in QuickBooks Online.
- Select Check or QuickBooks Payment-Bank in the drop-down list of Payment methods.
To recurring sales receipts in QuickBooks, you can follow these steps:
- Go to Settings and click on the gear icon in QuickBooks account. Choose Recurring Transactions after selecting the gear icon.
- Search for the sales receipt of a customer and click on Edit.
- Go to the drop-down list of Payment methods and select Check or QuickBooks Payment-Bank.
Step 2: Enter the Bank Details of the Customer
The bank details of the customer can be entered in QB Online in the following steps:
- Select the Enter Bank info button in QuickBooks.
- Enter the details of the customer. These include Account Type, Name, Financial institution, Account number, and Routing number.
- Select the “Use this account information in the future” option. The payments of the customer will automatically received when they are due.
Step 3: Get Customer’s Authorization
You can get the authorization of your customer in two steps. These are as follows:
- Tick marks the checkbox at the left side of the statement “Signed authorization to print an authorization paper that your customer can fill out and sign”.
- After choosing this option, select the ‘I have signed an authorization checkbox to show you have received the transaction’.
- Click on the Save button.
Step 4: Process Payment
The payment can be processed in three steps. These include the following:
- Tick the checkbox at the left side of the statement ‘I have authorization and would like to process this transaction’ on the transaction form.
- Verify the transaction and click on the Save and Send button.
- Change the email message to your customer. After that, click on the Send and Close button.
Now, you can see that the ACH payment can be processed successfully in the QuickBooks Online(QBO) account.
How to record ACH Payments in QuickBooks?
The steps that you can record ACH payments in QB Online are as follows:
- Click on the Sales tab at the left panel of the QuickBooks account.
- Make sure that the Invoices are selected at the top of the page.
- Choose the Receive Payment option near an invoice. A Receive Payment page in the QuickBooks account. After that, you can select ‘add any outstanding transactions’ on this page.
- Click on the drop-down menu to click on the Save and New or Save and Close option.
This is how you will record ACH payments in your QuickBooks Online account.
Conclusion
This blog describes the steps to process and record ACH payments in QuickBooks Online. This payment option can be used in every business for fund transfers. It is less expensive and provides more security as compared to credit cards, debit cards, and paper checks.
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