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Taking your business to the next level and enhancing each aspect of your company’s accounting actions, QuickBooks offers custom-solution to match every need. One of such vital actions is recording an ACH payment in QuickBooks. For doing this, the first requisite is to enabling provision for sending and receiving payments via electronic mode.
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Table of Contents
What are ACH Payments?
Abbreviated as ACH, Automated Clearing House payment is a way of transfer of funds done via the electronic medium. If you wish to transfer money from one particular account to another account taking place between two different banks or at the same time, ACH Payments can be considered as a splendid option.
Using ACH transfers have many advantageous angles, especially for small businesses. Actions like the below mentioned can be exercised smoothly with ACH Payments:
- Moving money between two different bank accounts belonging to you
- Initiating direct deposits
- Setting debit/credit card transactions
Steps to Record an ACH Payment in QuickBooks
This article will help you to go through the steps involved in recording an ACH payment in QuickBooks Desktop. Scroll below to get to the steps for understanding the process of recording an ACH payment in QuickBooks.
There are primarily two ways of recording an ACH payment in QuickBooks. Let’s understand each method and the respective steps which goes into the learning of the same:
METHOD 1:
Step 1: You can start by choosing the check or instead consider choosing the ACH payment method at the time of the creation of recurring or one-time sales receipt when you get a respective payment
Step 2: Enter the information of your customer’s bank account
Step 3: Get validated the customer’s bank account information validated
Step 4: Fill the form
Step 5: Start processing the transfer and you shall get the payment
After the first method, let’s get to understand the second method involved in recording an ACH payment in QuickBooks:
METHOD 2:
Step 1: Tap on Sales which you will find in the left navigation bar
Step 2: Before proceeding further, check whether the Invoices has been chosen from the top of the page
Step 3: Choose Receive Payment which you will find beside the invoice which you shall be needing
Step 4: Receive Payment page will appear; choose to add any outstanding transactions
Step 5: Tap on Save and New or Save and close by choosing the drop-down
Do you still think recording an ACH payment in QuickBooks is a difficult task? If no, then this article must have contributed significantly to your queries and issues in knowing how to record an ACH payment in QuickBooks.
However, if the answer is yes, then you need to get in touch with the experts who know the quick fixes for all of your queries.
What are Wire Transfers? How does it differ from ACH Payments and which one is better?
A wire transfer can be understood as a particular process of transferring funds via an electronic medium and can be initiated between two different bank accounts or credit unions.
While ACH payments and wire transfers both are methods of electronic money transfers, nevertheless each has its unique trait and makes it distinguishable:
Time Taken:
ACH payments take 1-3 days for processing the funds transfer, while wire transfers are done in real-time.
Costs Involved:
ACH transactions are way cheaper and also free most of the time in comparison to wire transfers which varies from $23 and $6 for domestic outbound transactions and domestic inbound transactions respectively.
Intermediary Channels
ACH Payments takes place through a partnership that connects two banks and a clearinghouse while in a wire transfer it passes through the banks only.
When considering which one’s the best, honestly both ACH transfers and wire transfers have been validated to be safe for businesses and individuals. However, keeping in mind data security and your criterion which you adhere to, choose an electronic fund transfer medium accordingly.
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+1-347-428-6831 or chat with experts.
Frequently Asked Questions (Faqs)
Why do I use ACH Payments? What are the Benefits Associated with ACH Payments?
Setting up and recording ACH payments in QuickBooks becomes very vital for your business since you enjoy a lot of advantages along with it. Here are few highlights of why you should start using ACH Payments:
Convenience of electronic funds transfer Low processing fees Increased retention
I want to Record Partial Payments. How can I Record Partial Payments?
QuickBooks help you in tracking open balances and thus you can record the respective partial payments. If you wish to record partial payments, the following would stand as an aid for the same:
Click on Create icon and choose Receive Payment From the drop-down, select the respective customer Find an ideal payment method and choose it along with the reference number Under Amount Received, choose the payment amount Choose the transaction from the Outstanding transactions to which you wish to apply for the payment You can choose the money to get deposited into your checking account/undeposited funds account Tap Save and Close
Which type of Transactions are used for ACH Payments?
The ACH Payments can be used for the type of transfers mentioned below:
Payroll Online bill payment Tax refunds Credit card payments Money transfers Interest payments Annuity payments Employer reimbursements Mortgage and loan repayment Person-to-person (P2P) transactions Business-to-customer (B2C) transactions Business to business (B2B) transactions
How Can I Record Joint Payments?
To record Joint Payments follow the mentioned points:
• Firstly, go to create icon and select Receive payments
• Type the customer’s name, amount, payment method, and reference number. (Reference no. check number noted.)
• In the memo filed mark an entry that this field is included in the check
• You have the option of depositing the money into your checking account or to the undeposited funds’ account
• Click Save and Exit.
For the second customer, repeat the procedure that is mentioned above. You have to see that the check number is the same and you have entered a descriptive memo so that they show as one deposit on the register.
What is the Difference Between ACH Payments and Credit Card Payments?
The difference between ACH payments and credit card payments are:
Processing Times: Payments made with a credit card can sometimes be processed fast, showing up in your account in only a few business days. Contrarily, ACH payments may take up to 5 days or longer.
Fees: ACH processing fees are frequently flat and averaging. ACH fees are typically lower than credit cards.
Payment Guarantee: The funds are guaranteed to be available if a credit card payment posts. Recurring payments can be stopped, though, if card numbers change, the card is lost or stolen, or if the account is maxed out. ACH payments use bank account numbers to transmit funds. The account and routing numbers won’t change as long as the account is active, ensuring uninterrupted payments. The payment will not be processed if there are insufficient funds (NSF) in the account, and the same is true if the account is closed.
How Much does ACH Processing Cost?
For ACH transfers, you will be charged a fixed rate or a percentage. Per transaction, standard flat ACH fees range from $0.20 to $1.50, while percentage charges range from 0.5% to 1.5%. In case a business is high risk then it may also have to pay a higher amount.
What are the Benefits of ACH Payments?
With the help of ACH payments in QuickBooks, It conveniently transfers all the electronic funds. Its processing fees are also lesser and it increases retention.
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