How to Process an eCheck in QuickBooks Desktop

Processing eChecks in QuickBooks Desktop can help streamline your business's payment processing by allowing customers to pay directly from their bank accounts. This not only simplifies transactions but also reduces the time and costs associated with handling paper checks. In this guide, we'll walk you through the steps to process an eCheck in QuickBooks Desktop.

What Is an eCheck?

An electronic check, or eCheck for short, is a digital copy of a paper check. It allows funds to be transferred directly from a customer's bank account to your business account through the Automated Clearing House (ACH) network. This method is secure, cost-effective, and can be processed quickly.

Benefits of Using eChecks in QuickBooks Desktop

Cost-Effective: Lower processing fees compared to credit card payments.

Faster Processing: Funds are typically available within 3-5 business days.

Convenient: Customers can pay directly from their bank accounts without needing a physical check.

Reduced Errors: Automated data entry reduces the likelihood of errors that can occur with manual check processing.

Prerequisites for Processing eChecks in QuickBooks Desktop

Before you can process eChecks in QuickBooks Desktop, ensure that you meet the following requirements:

QuickBooks Payments Account: You need to have a QuickBooks Payments account. This account allows you to accept eChecks, credit cards, and other forms of payment.

Bank Account Information: Ensure that you have your customer's bank account information, including the account number and routing number.

Customer Authorization: Obtain authorization from your customer to process the eCheck. This can be done through a signed authorization form or recorded verbal consent.

Steps to Process an eCheck in QuickBooks Desktop

Step 1: Set Up QuickBooks Payments

If you haven't already set up QuickBooks Payments, follow these steps:

Sign Up for QuickBooks Payments: Go to the QuickBooks Desktop homepage and click on "Customers" from the menu bar. Select "Link Payment Service to Company File" and follow the prompts to sign up for QuickBooks Payments.

Enable eCheck Payments: Once your QuickBooks Payments account is set up, ensure that eCheck payments are enabled. You can do this by going to the "Preferences" section and selecting "Payments." Check the box for eCheck payments.

Step 2: Create a Sales Receipt or Invoice

To process an eCheck, you'll need to create a sales receipt or invoice in QuickBooks Desktop:

Create a Sales Receipt:

Go to the "Customers" menu and select "Create Sales Receipts."

Fill out the necessary details, such as the customer name, date, and items/services sold.

In the "Payment Method" dropdown, select "eCheck."

Enter the customer’s bank account information, including the routing number and account number.

Click "Save & Close."

Create an Invoice:

If you're billing the customer and want to receive an eCheck payment later, go to "Customers" and select "Create Invoices."

Fill out the invoice details and send it to the customer.

When the customer is ready to pay, you can apply the eCheck payment to the invoice by selecting "Receive Payments" from the "Customers" menu, then entering the eCheck details.

Step 3: Process the eCheck Payment

Once you've created the sales receipt or received the payment against an invoice:

Verify Payment Details: Double-check the payment details to ensure that all information is correct.

Submit the Payment: Click "Submit" to process the eCheck payment. QuickBooks will transmit the payment through the ACH network.

Wait for Confirmation: It typically takes 3-5 business days for the eCheck to be processed and the funds to be deposited into your business account. QuickBooks will update the payment status once the transaction is complete.

Step 4: Record the Transaction

After the eCheck payment has been processed and the funds have been deposited into your account:

Record the Deposit: Go to the "Banking" menu and select "Make Deposits." Select the eCheck payment you just processed and record it as a deposit in your bank account.

Reconcile the Transaction: Ensure that the payment is properly reconciled in QuickBooks to keep your accounts accurate.

Handling eCheck Payment Issues

If you encounter any issues while processing an eCheck, here are some common troubleshooting tips:

Insufficient Funds: If the customer’s account has insufficient funds, the eCheck may be rejected. Contact the customer to arrange for a different payment method.

Incorrect Bank Information: Double-check the bank account and routing numbers for accuracy. An incorrect payment request may result in the payment being rejected.

Payment Delays: eCheck payments typically take a few days to process. If you experience significant delays, check with your bank or QuickBooks Payments support for assistance.

Conclusion

Processing eChecks in QuickBooks Desktop is a simple and efficient way to handle customer payments directly from their bank accounts. By following the steps outlined in this guide, you can set up eCheck processing, create sales receipts or invoices, and manage eCheck payments seamlessly. If you encounter any issues, QuickBooks support is available to help troubleshoot and resolve any problems.