One common way businesses handle payments today is through EFT( Electronic Funds Transfer). EFT allows money to be transferred directly between banks making the process faster and more secure compared to traditional methods like checks. If your business receives or makes EFT payments then it is important to record them properly in your accounting system to accurate financial records. QuickBooks Online is one of the most popular tools for managing business finances and it tracks EFT payments easily. In this blog, we will discuss EFT payment, how to record an EFT payment in QuickBooks Online and setup QuickBooks Online to record EFT payments in detail.
What is EFT Payment and How Does it Work?
EFT payment is a method of transferring money between banks without using paper checks or cash. It is a quick, secure and cost effective way to send or receive payments. EFT allows money to be moved directly from one bank to another bank through a digital network. The most common types of EFT payment which are mentioned below.
- ACH payments (Automated Clearing House).
- Wire Transfer.
- Direct Deposits.
How does EFT Payment Work?
Here are some key points how EFT payments work which are mentioned below.
- Initiation: To send EFT payment, your business initiates the payment through your bank or payment service. It should pay a supplier, receive customer payments and transfer funds one to another account.
- Processing: Once payment is initiated then it goes through a secure system where funds are verified and processed. The system ensures that there are enough funds in the sender’s account and moves funds between banks without any physical needs.
- Transfer: After the verification, the money is transferred directly from one account to another account. This whole process works digitally which makes it faster than the traditional method.
- Completion: Once a transaction is complete then the recipient’s account is credited in amount.
Steps to Record an EFT Payment in QuickBooks Online
Record an EFT payment in QuickBooks Online is simple and ensures that your financial records stay accurate. Here we explain how to record payment in QuickBooks Online.
Step1: Log in your QuickBooks Online account.
Step 2: Click New Button: Click on the New button to open the transaction option.
Step 3: Then select “Receive Payment” or “Bank Deposit”. Receive payment for customer payment and bank deposit for direct deposit into your bank account.
Step 4: Record Payments
For Receive Payment
- Choose a customer.
- Then enter the payment amount and select EFT or bank transfer as payment method.
- Apply payment to the appropriate invoice and click Save.
For Bank Deposit
- Select the bank account where the deposit was made.
- Enter the deposit amount and choose the account to categorize it.
- Choose EFT as the payment method and click Save.
Step 5: If you have bank feeds set up then QuickBooks can automatically find and match the EFT payment in your bank transactions.
Step 6: Check that the payment is recorded correctly and reconcile your accounts to ensure everything matches.
How to Record an EFT Deposit in QuickBooks Online?
Here we explain how to record an EFT deposit in QuickBooks Online which is mentioned below.
Step 1: Sign in to your QuickBooks Online account.
Step 2: Click the new button then choose a bank deposit.
Step 3: Select the bank account where the EFT deposit was made.
Step 4: Then enter deposit details such as date, received from, account, amount and payment method.
Step 5: After entering the details click Save and Close.
Setting Up QuickBooks Online to Record EFT Payments
To record EFT payment in QuickBooks, you need to set up a few things first. After that QuickBooks can automatically track and categorize EFT payments for you. Here are instructions to set up QuickBooks online to record EFT payments.
- In QuickBooks, link your bank account, go to the banking tab and click Link Account. Then choose your bank and enter your login details to sync bank transactions that also include EFT payment.
- Set up payment method, click gear icon > Account and Setting > Payments. Also add EFT, ACH or bank transfer as payment methods then save.
- In the Banking tab, select Connect Account and follow prompts to link your bank then allow QuickBooks to automatically import EFT payments.
- To create a Customer and Vendor profile, go to Sales or Expenses or create a profile for anyone you receive and make EFT payments.
- In Account and Setting, set EFT as the default payment method for invoices or bills and save your setting.
- Double check everything is set up correctly to ensure QuickBooks records EFT payments accurately.
Common Issues with EFT Payments in QuickBooks Online
Here are some common issues you might encounter with EFT payments in QuickBooks Online which are mentioned below.
- Mismatch Between Bank and QuickBooks Amounts: Always double check amounts in QuickBooks and your bank to avoid discrepancies.
- Missing Transactions: If your EFT payment is missing then try reconnecting your bank feed or enter it manually.
- Duplicate Transaction: Check for duplicates and delete duplicates in your bank feed.
- EFT Payments Declined or Rejected: Contact with your bank if an EFT payment is declined due to insufficient funds or errors.
- Transactions not Appear in Bank Feed: EFT payments should not sync automatically, you need to try reconnecting or refreshing your bank feed.
Best Practices for Managing EFT Payment in QuickBooks Online
Here are best practices for managing EFT payment in QuickBooks Online which are mentioned below.
- Always make sure your bank account is set up properly to easily monitor EFT payments.
- Secure your payment information or EFT details using QuickBooks Online encryption and best security practice.
- You should enter EFT payments as soon as they’re made or received to keep your records current.
- Daily match your payments with bank statements to avoid conflict.
- Set up schedules for monitoring regular EFT payments to anticipate incoming funds.
- Regularly double check your entries and bank statements for accuracy.
Conclusion
In conclusion, we hope you found this blog post helpful for how to record an EFT payment in QuickBooks Online is straightforward. By linking your bank account, with bank feeds, and categorizing payments appropriately, you can maintain your transactions so easily. Also don’t forget to check and reconcile your payments in time to keep them accurate and up to date in your books of accounts.