Wednesday, December 29, 2010

Paying vendors via direct deposit in QuickBooks

Starting with version 2010, you can now pay your vendors via direct deposit in QuickBooks.  The $1.25 per payment still applies but with the savings of check stock, printer ink, envelopes, stamps and most importantly, time, the fee is well worth it.  And you could charge the fee back to your vendors since it is a convenience for them to receive payment electronically.

You must already be signed up for and fully activated for direct deposit services for your employees.  If your company does not have payroll or has not activated direct deposit, you will need to do that first.

To activate direct deposit for vendor payments, follow these steps:

From within your QB data file, click on Employees --> My Payroll Service --> Account/Billing Information

A screen will pop up showing all of your account and billing information.  In the Direct Deposit section, click on the Activate link:


Then the screen below will show.  Enter your Direct Deposit PIN # in the box and click Continue.
If successful, you will receive the following confirmation screen.  Click on Return to QuickBooks.


To set up a vendor for direct deposit, go to the Vendor Center, click on the vendor you want to set up and then click on the Edit Vendor button: 
Then click on the Additional Info tab.... and click on the Direct Deposit button:


Click the box next to "Use Direct Deposit for..." and fill in the bank account information for the vendor. Then click OK:


Use the Write Check or Pay Bills feature in QB to generate the payment to your vendor.  Keep in mind that two business days are required for direct deposit.  Weekends, holidays and other non-banking days do not count. So if you want to pay on Friday, December 31st, the direct deposit must be processed no later than 5pm PST on Wednesday, December 29th.  .  The QuickBooks software will alert you if you attempt to process a direct deposit payment without the required 2-business day gap.

We recommend you use "DD" as the check #: 


And be sure that the "Online Payment" box is checked.  This should be automatic if the vendor is set up for direct deposit.  Note:  If you want to issue a manual payment (not direct deposit) to a vendor that is set up for direct deposit, simply uncheck this box on their payment.


After saving the payment, this box will pop up:



If you just have the one payment OR are done entering all the DD payments you need to send, click on the Send to Intuit box.  If you have more payments to send, click the Close button and continue to enter your payments.

When you are ready to send the payment(s), either click on the Send to Intuit box after entering your last payment or go to Employees --> Send Payroll Data:



That's it!  This is a great feature that Intuit has added and I know many of my clients will be taking advantage of it!

~Cathi

8 comments:

  1. Hi Cathi,
    I have a problem, when I pay a vendor with DD, it doesn't count as a bill pay so their balance stays unpaid. If I try to correct this by paying bills, then it accounts for the payment twice. Is there any way to pay a bill for a vendor using DD?

    ReplyDelete
  2. Hi Cathi,,

    Really great article! It really Helped, Keep it up!


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