How to Record an ACH Payment in QuickBooks Desktop/Online – Learn the Process 

QuickBooks users must be able to send and receive online payments if they want to record an ACH payment in QuickBooks. ACH payments offer better ease of use and lower transaction fees, making them particularly beneficial for recurring transactions. This guide explains the steps to record an ACH payment in QuickBooks. 

What Is an ACH Payment and How Does It Work?

An ACH payment or Automated Clearing House payment is an electronic transaction that facilitates the transfer of funds between bank accounts, offering a streamlined and efficient method for financial transactions.   

It plays an important role in financial management by enabling businesses to collect payments from customers efficiently, pay vendors, and manage payroll. ACH payments enhance banking operations by reducing the dependence on paper checks and manual processes, leading to cost savings and increased operational efficiency. They integrate effortlessly with accounting systems, ensuring the accurate and timely recording of financial transactions, which is essential for maintaining precise and up-to-date financial records.

What is the need to use ACH payments?

You can get the advantages mentioned below by using the ACH payments: 

• Move easily electronic funds 
• Increased retention 
• Affordable fees for processing 

How to Record an ACH Payment in QuickBooks Desktop? 

With QuickBooks Payments, QuickBooks Desktop has the option to group the customer payments you process every day. You’re only required to review how QuickBooks grouped and recorded the bank deposit. Follow the steps mentioned below to do that: 

First, you need to enable automatic matching so that QuickBooks can deposit and record customer payments for you: 

1. Click on Banking, then choose Record Merchant Service Deposits. 
2. Now, choose Change your deposit settings. 
3. Then, turn on the Auto match & record-setting. 
4. Lastly, click the Save option. 

When you receive your monthly bank statement, the steps mentioned below will allow you to review the payments in QuickBooks Desktop. 

1. First, navigate to the Banking menu. 
2. Now, choose Record Merchant Service Deposits. 
3. Then, navigate to the Recorded tab. 
4. After this, review the first bank deposit on the list. If you require more details, then choose the small arrow icon next to the deposit. This option will show each customer’s payment grouped into the deposit. 
5. Search for a similar bank deposit on your bank statement. 
6. If the date and amount are similar, check it off of your bank statement. QuickBooks recorded it accurately. 
7. Lastly, compare each bank deposit from the list. If any bank deposits in QuickBooks don’t match your bank statement, then make a note. 

 How to Record an ACH Payment in QuickBooks Online? 

You have the option to record the bill payment to an open bill by executing the normal process. However, you’re required to add a note to the Ref no. field rather than a number. Follow the steps mentioned below: 

1. First, on the left panel, choose Expenses. 
2. Now, navigate to the Vendors tab. 
3. Then, click on the vendor name. 
4. Navigate to the Transaction List tab. 
5. After this, look for the open bill and click on the Make payment option. 
6. Select the bank option below the Bank/Credit account. 
7. Then, on the right side, remove the check mark next to Print later. 
8. In the Ref no. field, enter the information that will help you recognize the form of payment (ex ACH). 
9. Now, enter the mandatory information. 
10. Lastly, choose the Save and Close option.    

Configure QuickBooks online for ACH Payment

You have the option to pay your bills through ACH directly and hassle-free using Online Bill Pay. QuickBooks Online (QBO) works at the same time as Online Bill Pay and lets you: 

• You can pay your bills electronically using QuickBooks Online.
• You can pay vendor bills directly from QuickBooks Online via ACH (bank transfer) or a paper check. 
• Record payment transactions correctly and automatically in QuickBooks Online.   

To begin, you’re required to sign up for Online Bill Pay by following the mentioned steps below: 

1. First, open QuickBooks, then navigate to the Apps menu. 
2. Now, search for Bill Pay in the search field. 
3. Then, choose Bill Pay for the QuickBooks Online app card. 
4. In the app card, you will discover two more buttons. Choose Get Bill Pay. 
5. Once you’ve reached the Learn More page for Online Bill Pay, choose Get Started. 
6. Now, enter the information of your company, then Next. 
7. Then, follow the instructions given on the screen to connect your bank account, then click Next. 
8. After this, enter your personal information, then click Next. 
9. Lastly, answer a few identification check questions. If you need help with this process or you get declined during the identity check process, contact Intuit’s Care Support.    

Note: Although no monthly subscription fee is required for this service, you will get charged a transaction fee for every payment you process. 

What are the different forms of payments that can be made using ACH payments?

Below are the types of transactions that are suitable for ACH payments.

• Interest payments
• Bill payments
• Transactions involving Business to Business (B2B)
• Transactions involving Business to Customer (B2C)
• Transactions involving person-to-person (P2P)
• Payroll, etc.

What Are the Best Practices for Recording Returned ACH Payments in QuickBooks?

Establishing best practices for recording returned ACH payments in QuickBooks is crucial for accurate financial reporting and effective business finance management. This involves properly categorizing returned ACH payments to reflect their cash flow impact and reconciling these transactions with bank statements. Accurate documentation and entry of these payments help businesses assess financial health, identify trends, and ensure compliance with accounting standards, enhancing the credibility of financial statements. Adhering to these practices allows businesses to manage finances efficiently and improve operational efficiency.

1. Keep Track of Returned ACH Payments

A key best practice for recording returned ACH payments in QuickBooks is to diligently track and document all such payments using the accounting tools available. This ensures accurate transaction tracking and maintains the integrity of financial records. Utilizing QuickBooks’ ACH payment return feature allows businesses to monitor and reconcile returned payments effectively, providing a clear and transparent view of their financial standing.

2. Set Up Alerts for Returned ACH Payments

Implementing alert systems for returned ACH payments within financial software and banking platforms ensures prompt awareness and swift action on such transactions. These alerts are vital for effective ACH transaction management, helping businesses minimize financial losses and maintain positive client relationships. QuickBooks’ alert systems streamline the monitoring and handling of ACH transactions, facilitating efficient reconciliation and smooth banking operations.

3. Regularly Reconcile Bank Accounts

Regular bank account reconciliation is essential for accurately recording returned ACH payments in QuickBooks, ensuring precise transaction recording and optimal use of financial software. This practice helps identify discrepancies, misallocations, and errors, maintaining accurate financial records and regulatory compliance. By integrating bank statements and transaction details, QuickBooks users achieve financial transparency, enabling accurate reporting and informed decision-making while promoting overall organizational financial health.

ACH payments offer a convenient and quick way to process transactions through QuickBooks. Compared to traditional methods, they are simpler and have lower transaction fees.