It’s no secret that QuickBooks Online is an excellent tool for handling your business’ finances. Among its standout features is effective payment management.
Whether you’re a seasoned QuickBooks user or just starting out, you may wonder how to receive payments in QuickBooks Online.
In this blog, discover how to receive payments in QuickBooks Online, including:
- Payment options.
- Common mistakes.
- Best practices.
Let’s get started!
Steps to receive payments in QuickBooks Online
Image credit: QuickBooks
Perhaps the most important part of running a business, receiving payments is an essential process that keeps your finances current and healthy. Here’s a guide to show you how to receive payments in QuickBooks Online:
Set up payment options
Before receiving and processing any payments, sign up for QuickBooks Payments and set up your preferences:
- Navigate to “Settings” and select “Account and Settings.”
- Click on the “Payments” tab and select “Learn more.”
- Click on “Set up Payments” to sign up.
Note: Only the primary administrator of your QuickBooks account can apply for Payments.
- Fill the “About your business,” “About yourself,” and “Your deposit account” fields.
- Once complete, select “Review and finish,” then “Get set up.”
Once you’ve set your payment options, your next step is to create personalized invoices. Unlike sales receipts, which offer quick sales snapshots, invoices serve as detailed transaction records. Here’s how to make them:
- Go to “+ New” and select “Invoices.”
- Select “Add customer” and choose a customer from the dropdown menu. Select “Add new” if you need to add a new customer.
- Fill in the “Invoice date,” “Due date,” and “Terms” fields.
- Select “Add product or service” and choose from the dropdown menu. You can also select “Add new” to add new invoices for products and services.
- Enter the price you’re charging.
- Next, you’ll see “Ways to pay.” If you want to change these payment options, select “Payment options” in the right sidebar. Toggle any of these options on or off.
- Manage discounts, fees, and taxes in the “Discount and fees” section.
- Click “Save.”
Creating invoices with QuickBooks Online helps customers understand payment details and ensures smooth payment processing.
Accept online payments
After setting payment options and creating invoices, it’s time to accept online payments through QuickBooks:
- Go to “Settings” and select “Account and Settings.”
- Click on the “Payments” tab and ensure the online payment option is enabled.
- Select your preferred gateway and follow the on-screen instructions to link your account. QuickBooks Online integrates with payment gateways like PayPal, Stripe, and Square.
Accepting online payments through QuickBooks Online increases convenience and decreases manual work for you and your customers. As a result, you get paid more reliably and on time.
How long does it take to receive payments in QuickBooks Online?
Now that you know how to receive payment in QuickBooks Online, you’re probably curious about processing times. Here’s the scoop:
Funds typically deposit within five days after your first payment, with potential delays during merchant account setup. Once established, credit card payments typically deposit within two business days. Bank transfers, however, may take three to four days to process.
Familiarizing yourself with these timelines enhances your financial planning and improves cash flow.
Recording invoice payments
Getting familiar with how to receive payments in QuickBooks Online is just the first step. After receiving a customer’s payment, you need to record it in QuickBooks to mark the invoice as paid. Failing to do so leaves invoices open and unpaid in your reports.
Luckily, recording invoice payments is straightforward:
- Go to “+ New” and select “Receive Payment.”
- Select the name of your customer from the “Customer” dropdown list.
- Pick the payment method from the “Payment method” dropdown.
- In the “Deposit to” dropdown list, choose the account where you deposited the payment.
Tip: If you need to group the payment with others, select “Undeposited Funds” from the dropdown list.
- In the “Outstanding Transactions” section, mark the checkbox for the invoice you’re recording the payment for.
- Enter the “Reference no.” and “Memo” if needed.
- Once complete, hit “Save and close.”
Payment options in QuickBooks Online
To fully grasp how to receive payment in QuickBooks Online, it’s important to understand the payment types it supports. With QuickBooks Payments, you can accept:
- Credit cards.
- Debit cards.
- ACH bank transfers.
Note that payment status and options vary based on your:
- Business type.
- Specific circumstances.
Let’s break down some possibilities:
Delayed payments in QuickBooks Online
Sometimes, payments in QuickBooks Online take a bit longer than expected.
This could be due to a variety of reasons, such as:
- Batch deposit delays.
- Transactions involving refunds or returns.
- Bank holds.
- Account reviews.
- Bank rejections.
Understanding these factors helps you anticipate, prevent, and deal withdelayed payments.
Instant payments in QuickBooks Online
QuickBooks is designed to get you paid faster, especially with its Instant Deposit feature. Instant Deposit lets you transfer up to $25,000 per day. You can use this feature up to five times each day, and your limit resets every day.
Funds typically appear in your bank account within a few minutes, although it could take up to half an hour. Keep in mind that all transactions are reviewed for risk, and there may be third-party delays.
Partial payments in QuickBooks Online
Sometimes, customers pay you in portion for a product or service. This is referred to as a partial payment. Customers may make partial payments for various reasons, like installment plans or contractual agreements.
QuickBooks Online records these payments efficiently, letting you:
- Track staggered payments.
- View outstanding balances.
- Predict income flows better.
Partial payment tracking is ideal for business owners who deal with staggered deliveries or extensive project timelines.
Payments through QuickBooks mobile app
Now, let’s talk mobility. Imagine you’re at a jobsite and need to accept a payment — that’s where the QuickBooks mobile app comes in.
With this app, you can accept payments from customers using your mobile device. To do this, you’ll need to connect your card reader to the QuickBooks GoPayment app.
Once connected, you can accept bank card payments via tap or insert, as well as digital wallet payments like Apple Pay and Google Pay.
Benefits of using QuickBooks for receiving customer payments
Learning how to receive payments in QuickBooks Online simplifies your financial management. Using QuickBooks for customer payments offers many benefits:
- Convenient payment methods: QuickBooks simplifies accounts receivable management with convenient features like transaction entry and invoice automation.
- All-in-one solution: The software provides a unified platform for invoicing, payment processing, and increased efficiency.
- Time-saving: QuickBooks simplifies invoice creation with pre-filled customer information, customizable templates, and item lists.
- Accuracy: The platform reduces errors by performing automatic calculations based on predefined settings, ensuring accurate invoices.
- Improved tracking and organization: QuickBooks automatically tracks invoices for easy payment monitoring and account reconciliation.
Common issues when receiving payments in Quickbooks
As you navigate payments in QuickBooks, it’s important to be aware of common costly mistakes. Keep an eye out for these issues when receiving payments in QuickBooks:
- Misapplied payments: Payments that aren’t linked to the correct invoice make it challenging to track outstanding invoices, which leads to inaccurate balances.
- Overlooking undeposited funds: In QuickBooks Online, “Undeposited funds” temporarily stores payments until you combine them for bank deposit. If moved incorrectly, you may have double entries.
- Direct entry of payments as deposits: Entering payments into deposits instead of the “Receive payment” tool can cause paid invoices to appear as open, causing statement inaccuracies.
Best practices to avoid invoice and payment errors
Now that you’re familiar with some issues when receiving payments in QuickBooks, let’s explore best practices to help you avoid them:
- Accurate customer and vendor information: Ensure correct and up-to-date information, as this forms the foundation of error prevention.
- Use invoice templates: Leverage custom invoice templates to maintain consistency and reduce the risk of missing information.
- Review invoices: Always double-check invoices for accuracy before sending them to customers. Verify item descriptions, quantities, prices, and any applicable discounts or taxes.
- Regular reconciliation: Reconcile your accounts receivable and accounts payable regularly to identify discrepancies or overdue invoices. This helps keep your records in good shape.
Get paid sooner with Method + QuickBooks Online
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QuickBooks Online receive payment: Frequently asked questions
Why is receiving payments in QuickBooks Online important?
Knowing how to receive payment in QuickBooks Online is vital as it:
- Simplifies income tracking.
- Lowers the chance of errors.
- Saves you previous time.
By utilizing QuickBooks Online for payments, you can secure:
- Accurate financial records.
- Maintained positive cash flow.
- All the information you need to make informed decisions.
Can I record partial payments in QuickBooks?
Yes, you can record partial payments in QuickBooks. This is helpful for businesses that receive payments in installments or have clients with outstanding balances.
Recording partial payments ensures precise tracking of your income and balances, which keeps your financial records spot on.
See how Method simplifies your payment processing today.
Photo credit: Andrea Piacquadio via Pexels