QuickBooks Online Bill Payment and Billing Solutions

Online Bill Payment
Online bill payment is a QuickBooks online banking feature that allows users to send payment instructions to their financial institution online. Online payment can always be used, whether a vendor accepts electronic payment or not. If a vendor is set up to receive electronic payments, the financial institution's payment processor transmits the payment to the vendor electronically. If a vendor is not set up to receive electronic payments, the financial institution payment processor will create and mail a physical check. Online payment also sends information with the check (such as the invoice number, the invoice date, any discounts, credits, and general memo information) so that the vendor can properly apply the payment. If the user's financial institution does not offer online banking, including vendor payment, the user can use QuickBooks Bill Pay Service instead. The procedures to pay a vendor's bill online are the same, except an Intuit partner company processes the payment rather than the financial institution. For more information, visit Intuit's website at www.quickbooks.com.

Note: Online payees can be anyone to whom payment needs to be sent, except employees. Employees receive paychecks by direct deposit, which is discussed in NACPB's QuickBooks Advisor's Guide.

With the online bill payment feature, users can:

• Pay anyone in the U.S. directly from the computer.
• Send remittance information along with the payment.
• Save time normally spent writing checks, addressing envelopes, and buying stamps.
• Schedule a payment in advance to arrive on a certain date. (Payments can be scheduled up to 12 months in advance using the date fields on the "Write Checks" and "Pay Bills" windows and on the checking register.)
• Cancel payments online.

To pay a vendor's bill online, create online payment instructions in one of the following ways:

1. Write a Check by Selecting "Write Checks" from the "Banking" Menu. Create the check as usual but check the "Online Payment" box that appears under the check form. Note that the date field on the check form changes to read "Delivery Date" when the "Online Payment" box is checked. In that field, enter the date the payment should be delivered or processed, not the current date.
2. Create a Payment Using the "Pay Bills" Window. Choose "Pay Bills" from the "Vendors" menu to open the "Pay Bills" window. Then, select "Online Bank Pmt" in the "Payment Method" drop-down list, place a check by the bills to be paid, and enter the amounts to be paid
3. Create an Online Payment Instruction Using an Account Register. Open the register for the bank account from which the payment is to be made. Enter in the register the date the check is to be delivered and in the "Number" column type "SEND." Then, enter the payee and amount and click the "Record" button.

Payment instructions should now appear in the "Items Ready To Send" area of the "Online Banking Center" window. To send the instructions to the financial institution, place a check by the items to be sent and click the "Send/Receive Transactions" button.

Note: In QuickBooks 2008 or earlier, payment instructions appear in the "Items To Send" area of the "Online Banking Center" window and the user should click the "Go Online" button to send the instructions to their financial institution. If the payee is set up to receive electronic funds transfers, the financial institution's payment processor will transmit the payment electronically. If the payee is not set up to receive electronic funds transfers, the financial institution's payment processor will print a check and mail it to the payee.

Canceling Online Payment Instructions Canceling an online payment instruction in QuickBooks tells the financial institution's payment processor not to mail the check or transfer the funds electronically. Canceling a payment instruction is not the same as "stopping" a payment. It does not stop payment on a check that has already been sent to the payee.

To cancel online payment instructions, select the transmitted online payment in the bank account register and choose "Cancel Payment" from the "Edit" menu. Verify that the payment information is correct, and click "OK" to put the cancellation into the "Items Ready to Send" list of the "Online Banking Center." To send the cancellation, open the "Online Banking Center" window by choosing "Online Banking" and then "Online Banking Center" from the "Banking" menu, make sure the cancellation has a check mark next to it, and click the "Send/Receive Transactions" button.

Note: In QuickBooks 2008 or earlier, cancellations appear in the "Items To Send" area of the "Online Banking Center" window, and the user should click the "Go Online" button to send the cancellation to their financial institution. If an online payment has already been sent to the payee, the user should contact the financial institution sending the item.

QuickBooks Billing Solutions
QuickBooks Billing Solutions is a QuickBooks feature that simplifies the billing process and allows companies to receive payments from customers online. Companies can email invoices, reminders, and statements directly from QuickBooks. The customer can then pay the invoices or statements either by mail or online. If the company's customers prefer to receive their invoices, statements, or estimates by mail, this feature gives the company the option of having QuickBooks Billing Solutions mail their invoices, statements, or estimates and still accept online payment. ¹ QuickBooks Billing Solutions prints the invoices, stamps and stuffs the envelopes, and notifies the customer of overdue payments. In addition, customers can also view their billing information from their own online "Customer Account Center," a password-protected website. This website allows them to view their billing history, print and pay invoices, and email the company. For further information, select "Billing Solutions" from the QuickBooks onscreen help file.

Receiving Customer Payments Online One of the features of QuickBooks Billing Solutions is receiving payments from customers online. After the company has signed up for QuickBooks Billing Solutions, the customer can submit a payment online by clicking the link available in the email message sent with the invoice, statement, or estimate or if they received the invoice by mail (via QuickBooks Billing Solutions), they are provided with a Web address indicating that the invoice can be paid online. The customer may pay by credit card or bank account transfer. ² A nominal fee is charged for each online payment received. The steps a company must follow to receive online payments are as follows:

1. Sign up for QuickBooks Billing Solutions. Sign up for QuickBooks Billing Solutions by choosing "Billing Solutions Options" from the "Send" drop-down menu in the "Create Invoices" window. Follow the onscreen instructions.
2. Notify Customers. Customers need to be notified that the company is changing its billing and payment process. Customers may be notified by telephone or mass mailing. Mass mailings can be produced quickly for all customers by using the "Prepare Letters with Envelopes" feature in QuickBooks Pro, Premier, or Premier-Accountant. (See NACPB's QuickBooks Advisor's Guide.) Sample letters are available in the "Help Index" from the "Help" menu. Type the phrase "Billing Solutions, Notifying your customers about."
3. Send an Invoice, Statement, or Estimate by Email or by Mail via QuickBooks Billing Solutions. To send an invoice by email, create the invoice and choose "E-mail Invoice" from the "Send" drop-down menu. To send an estimate by email, create the estimate and choose "Send" from the "E-mail" drop-down menu. Edit the email information that appears, and customize the message, if necessary. Click "Send Now" to send the invoice or estimate immediately or the "Send Later" button to save the form and send it at a later time. If "Send Now" is not chosen, QuickBooks will automatically save the invoices, estimates, or statements to be sent later. To send several saved invoices, statements, or estimates at one time, select "Send Forms" from the "File" menu. Select the forms to send (a check mark will appear) and click "Send Now." The message may be edited by clicking "Edit E-mail" button. The default message may be edited by selecting "Preferences" from the "Edit" menu, selecting "Send Forms" from the scroll box, and editing the letter in the "Company Preferences" tab. Statements may be emailed by clicking the "E-mail" button on the "Create Statements" window. Each time a statement or invoice is sent by email, the "Allow online payment" checkbox must be marked in the "Edit E-mail Information" window to provide customers with the online payment option. Invoices, statements, or estimates can be mailed via QuickBooks Billing Solutions. This service prints the invoices, statements, or estimates, stamps and stuffs the envelopes and provides the customer with a Web address indicating that the invoice can be paid online. ³ For further information, select "Billing Solutions" from the QuickBooks onscreen help file.

Once payments are obtained online, notification will be received in QuickBooks in the "Reminders List" and by email. The Company is charged a fee for each online payment it receives. Customer payments and fees are easily downloaded and recorded into QuickBooks as follows:

1. Check the "Reminders List." The "Reminders" window is displayed by clicking "Reminders" on the toolbar. Look for a reminder that there are new online payments to record.
2. Record Online Payments. Payments are recorded in QuickBooks either by clicking the message in the "Reminders" window or by selecting "Receive Payments" from the "Customers" menu and clicking "Get Online Pmts" from the toolbar.
3. Record Online Deposits and Transaction Fees. Deposits for the payments are entered from the "Banking" menu. Choose "Make Deposits," select the online payments to record, and click "OK." (If transaction fees are known they can be entered at the same time.) Change the "Memo" field from "Deposit" another descriptive name to separate online payments from other payments (for example, Merchant Account or online deposit). Transaction fees charged for online receipts may be entered in the "Make Deposits" window as a negative number on a separate line from the deposit. Assign an expense account to track the fee. (Add one if necessary.)
4. Obtaining Online Transaction Fee Amounts. If transaction fee amounts are not known, they can be obtained from www.paypal.com/quickbooks. Enter your PayPal member login and click "Transaction History." A list of transactions will appear. Total the unrecorded fees and record the amounts in QuickBooks as previously discussed.

If an invoice or statement for online payment is sent and a payment is applied toward the customer's account after the form is sent, the website will not display the correct balance and the customer could overpay. The website can be updated for payments by synchronizing QuickBooks with the website. From the "Customers" menu, choose "Billing Solutions" and then "Synchronize Changes."

Credit Card Payments
Credit card payments make it easier for customers to pay by phone, mail, or in person and increase collection rates. To process credit card payments, users must have a merchant account. They can either use the QuickBooks Merchant Account Service or they can use a non-QuickBooks merchant account that they have signed up for through a financial institution. (Non-QuickBooks merchant account services require a card-swipe terminal, and the transaction will need to be manually entered into QuickBooks.)

QuickBooks Merchant Account Service QuickBooks provides a Merchant Account Service to accept credit cards including Visa, MasterCard, American Express, Discover, or Diners Card without additional machines, software, or phone lines for a discount fee. Credit card information is encrypted and stored in QuickBooks so it does not have to be re-entered. Credit card payments are downloaded into QuickBooks and automatically deposited into the client's checking account within five to seven business days. Credit card payments are recorded into QuickBooks as follows:

1. Apply for a QuickBooks Merchant Account. Complete a Merchant Account Services application over the Internet at www.quickbooksmerchantservice.com. Click "Apply Online," and the user will be directed to the online application. Processing and fee information will be displayed.
2. Record Credit Card Payments. Once a merchant account is set up, enter customer payment information in QuickBooks from the "Customers" menu in "Receive Payments" (if the invoice was previously entered in QuickBooks) or "Enter Sales Receipt" (if no invoice was created). Enter the customer or job from the "Customer:Job" drop-down list. Select the credit card type in the "Pmt Method" drop-down list. In the "Card No." and "Exp. Date" fields, enter the card information. Select an invoice to apply the payment and "Group with other undeposited funds." Select "Process credit card payment when saving" checkbox and save the payment. A processing window will appear and the remaining credit card information should be entered (name and address). Click "Send" to process the payment. A notification will be received and should be printed as a receipt for the customer. If users subscribe to QuickBooks Billing Solutions, they can also receive their customers' credit card payments online. Customers can submit a credit card payment online by clicking the link available in the email message sent with the invoice, statement, or estimate; or if they received the invoice by mail (via QuickBooks Billing Solutions), they are provided with a web address indicating that the invoice can be paid online.
3. Deposit Credit Card Payments. Credit card payments should be recorded in QuickBooks using the same schedule of the merchant account processor (usually daily or weekly) and the same way they appear on the bank statement to facilitate bank reconciliation. From the "Banking" menu, choose "Make Deposits." From the "View payment method type" drop-down list, select the credit card types to be deposited. Select the payments to deposit and click "OK." Enter the date and a memo. If the fees are known they may be entered at this time. (Often fees are deducted from the amount deposited to the bank.) Select the "Received From" column, enter the charge card company, choose the expense account from the "From Account" drop-down list, and enter the fee with a negative number.

Credit Card Refunds To record a credit card refund, display the "Create Credit Memos/Refunds" window from the "Customers" menu. Enter the customer or job from the "Customer:Job" drop-down list. In the "Item" column, enter the name of the return item and ensure the item is marked taxable if sales tax was charged on the original sale. Click the "Use Credit to" drop-down list on the toolbar and select "Give Refund." In the "Issue a Refund" window, select how the refund will be issued in the "Issue this refund via" drop-down list. If issuing refund via check, select the appropriate bank account from the "Account" drop-down list, (choose the account that is used by merchant account for credit card transactions) remove the check number and enter "CC Ref" or a similar identification, enter a memo indicating that this is a credit card refund, clear the "To be printed" checkbox, enter a class, if applicable and click "OK." In the "Create Credit Memos/Refunds" window, select the "Process credit card credit when saving" checkbox and save the transaction.

Credit Card Voids Credit card transactions may be voided by 3 p.m. Pacific time on the day the transaction was processed. (The transaction generally must be treated as a refund after 3 p.m. Pacific time.) To void a payment, display the customer's payment in the "Receive Payments" or Enter Sales Receipts" window (the same window the original payment was recorded). The "Previous" button will display previous transactions. From the "Edit" menu, choose "Void Payment" or "Void Sales Receipt."

Credit Card Chargebacks A credit card chargeback can be recorded as a refund or as a bad debt expense. Chargebacks will show up on the bank statements separately. To record the chargeback as a bad debt, display the "Write Checks" window from the "Banking" menu. Choose the appropriate account from the "Bank Account" drop-down list. Choose the customer name (same as the original credit card payment) from the "Pay to the Order" drop-down list. Enter "CB" or similar identification as chargeback in the "No." field and the amount of the chargeback. Clear the "To be printed" checkbox and choose the account to charge on the "Expense" tab. Save the check.

For more information, go to NACPB's QuickBooks Advisor's Guide.

Free NACPB's QuickBooks Advisor's Guide
A free downloadable PDF version of NACPB's QuickBooks Advisor's Guide is available to NACPB Professional and CPB Network members in NACPB's password protected Members Only Internet portal.

¹ Statements have to be emailed to be paid online.
² A subscription to a merchant account is needed to accept credit cards.
³ Statements still have to be emailed to be paid online.