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! 

Is your business eligible to receive payments via QuickBooks?

Before you learn how to receive payments in QuickBooks Online, you need to address if your business if your business is viewed as eligible by Intuit QuickBooks.

The answer is yes! QuickBooks supports a wide range of businesses and offers payment solutions tailored to your needs. 

QuickBooks lets you receive: 

• Cash. 
• Checks.
• Online invoices. 
• Mobile payments. 
• ACH bank transfers. 
• Credit cards.

Steps: How 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:

1. Navigate to “Settings” on the QuickBooks Online page and select “Account and Settings.”
2. Once the section is selected, click on the “Payments” tab.
3. Select “Learn more.”
4. Click on “Set up Payments” to sign up.

Note: Only the primary administrator of your QuickBooks account can apply for Payments.

5. Fill in the “About your business,” “About yourself,” and “Your deposit account” sections to ensure accurate entry of your bank account details.
6. Once complete, select the “Review and finish” button, then “Get set up.”

Create invoices

Once your Payments account is confirmed and configured, your next step is to create personalized invoices. Unlike sales receipts, which offer quick sales snapshots, invoices serve as detailed transaction records.

Creating invoices with QuickBooks Online helps customers understand payment details and ensures smooth payment processing.

Here’s how to make them:

1. Go to “+ New” and select “Invoices.”
2. Select “Add customer” and choose from the customer dropdown. Select “Add new” if you need to add a new customer.
3. Once your customer is navigated to, fill in the “Invoice date,” “Due date,” and “Terms” fields.
4. Select “Add product or service” and choose from the drop-down menu. You can also select “Add new” to add new invoices for products and services.
5. Enter the price you’re charging.
6. After the price is adjusted, 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 with the corresponding checkbox.
7. Once it is updated, manage discounts, fees, and taxes in the “Discount and fees” section.
8. After everything is checked for accuracy, click the “Save” button.

Accept online payments

Once the invoice is saved, it’s time to ensure your payment is received in QuickBooks: 

1. Go to “Settings” and select “Account and Settings.”
2. Once that is clicked, select the “Payments” tab and ensure the online payment option is enabled.
3. After the online payment option is applied, select your preferred gateway. 
4. Once the gateway is entered, follow the on-screen instructions to link your account.

Note: QuickBooks Online integrates with several payment gateways like PayPal, Stripe, and Square.

Knowing how to receive payments in QuickBooks Online helps you: 

• Increase convenience. 
• Decrease manual work. 
• Improve customer experience. 
• 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 payments 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, your credit card payment is deposited within two business days. Electronic 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 the invoice balance unpaid when you go to reports. 

Luckily, learning to record payments is straightforward:

1. Go to “+ New” and select “Receive Payment.”
2. Select the customer name from the “Customer” column. 
3. Pick the payment method (e.g., cash, check, credit card, electronic transfer) from the Payment method dropdown.
4. In the “Deposit to” drop-down list, choose the desired account deposited to. 

Tip: If you need to group the payment with others, select “Undeposited Funds” from the drop-down list. This simplifies the deposit process and lets you track your undeposited funds account usage.

5. In the Outstanding Transactions section, check the Transaction ID of the invoice you’re recording the payment amount for.
6. When your desired invoice is accessed, enter the “Reference no.” You can also enter any notes or memos here. 
7. Once complete, hit “Save and close” at the bottom. 

And that’s it! Your invoice payment is recorded.

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.
• Customers.
• 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 with delayed 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 job site 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 on predefined settings, which ensures matching transactions and invoices. 
• Improved tracking and organization: QuickBooks automatically tracks and orders invoices for easy payment monitoring and account reconciliation.
• Enhanced reporting: QuickBooks ensures all received payment information is reported for better financial oversight. Simply select run for the report you need and choose the reporting category.

Common issues when receiving payments in Quickbooks

As you navigate how to receive payments in QuickBooks Online, it’s important to be aware of common 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 a 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.

If you face challenges receiving payments, the QuickBooks community is an excellent starting point. You can use the platform to: 

• Share experiences. 
• Reply to fellow users. 
• Access answers from QuickBooks experts.

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

To ensure your information is processed correctly, review the:

• Invoice number(s). 
• Payment reference number. 
• Payment receipt confirmation. 
• Payment date and date of entry. 
• Deposit slip number (if applicable). 
• User ID (of person processing the payment). 

If incorrect, update and make the necessary adjustments (if any). 

Use invoice templates

Leverage custom invoice templates to ensure your invoice is reviewed for consistency and accuracy. 

Review invoices

Always check numbers before sending them to customers. Make sure your item is matched to the order quantity, price, and tax. 

Regular reconciliation

Regularly reconcile accounts and review your reconciliation status to identify discrepancies. When your account is reconciled, it helps keep your accounts in good shape.

Problems that may occur when payments are not recorded correctly in QuickBooks

Paid invoices continue to be open

When you don’t apply payments to the correct invoice, the invoice remains open. This triggers unnecessary collection efforts and damages customer relationships. 

To avoid such errors, consider hiring an accountant who can ensure accurate entries and prevent duplicates.

Overstated accounts receivable balances

If you don’t accurately apply payments, your accounts receivable balance will not reflect the true amount of money that your customers owe you. This leads to discrepancies in your financial statements and unforeseen losses.

Exceeded sales (income)

Recording payments incorrectly as deposits or sales receipts inflates your income figures. This is because the income was already accounted for when you issued the invoice. Such errors distort your financial performance analysis and can give you a false sense of financial stability.

Get paid sooner with Method + QuickBooks Online

Method is the #1 lead-to-cash automation tool for QuickBooks users. With its two-way sync with your accounting software, you can receive payments faster and keep your finances up to date.

Put an end to the constant battle of manual data entry — Method automates everything from invoicing to updating accounts, all in real time. Whether it’s recurring billing or one-time transactions, Method ensures stress-free payment processing. Start your 14-day free trial here.

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 precious time.

By mastering how to receive payments in QuickBooks Online, you can secure:

• Accurate financial records.
• Consistently 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.

What happens If a customer’s payment fails?

If a customer’s payment fails in QuickBooks Online, you need to address the failed transaction. This may involve: 

• Reattempting the charge.
• Contacting the customer for a different payment method.
• Updating the invoice status to reflect the failed payment.

Is It possible to receive international payments through QuickBooks Online?

Yes, it is possible to receive international payments through QuickBooks Online. This lets businesses cater to a global customer base and accept payments in different currencies. 

Can I customize the payment receipts sent to customers?

Yes, you can customize payment receipts to include your: 

• Branding. 
• Business information. 
• Other details.

See how Method simplifies your payment processing today. 

Photo credit: Andrea Piacquadio via Pexels

Whether you’re paying vendors or receiving customer payments, a constant flow of credit card charges is unavoidable. What’s worse is keeping up with these payments on a daily basis.

The good news is that QuickBooks Online comes with a credit categorization feature. This tool:

• Organizes credit card transactions.
• Speeds up accounting processes.
• Enhances financial reporting.
• Keep accurate reports of your financial activities.

Keep reading to learn how to categorize credit card payments in QuickBooks, including some common errors and best practices.

How do you categorize credit card payments in QuickBooks?

Credit card payments are recorded as transactions in QuickBooks. If you’ve linked your banking information with your QuickBooks Online account, credit card payments are automatically recorded.

However, sometimes there can be errors that cause a transaction not to show. Or, you may have made a credit card payment on a different account that you need manually add.

Follow the steps below to find out how to categorize credit card payments in QuickBooks.

How to categorize a credit card payment in QuickBooks Online manually

Here’s how you can manually categorize credit card payments in QuickBooks Online using the “Pay down credit card” function:

1. Navigate to “+ New” in the top left menu bar. Under the “Other” menu, select “Pay down credit card.”

2. Choose the credit card you paid or add a new one if it’s not listed.

3. Write the name of your payee if you wish you keep it on record. However, this step is optional.

4. Enter your payment amount and the date the payment was made, then choose the bank account used to make the payment.

5. You have the option to add a memo and any attachments you want to keep on record.

6. When you’re finished, click “Save and Close” in the bottom right corner of the screen.

How to categorize credit card payments in QuickBooks: Top options

Understanding how to categorize credit card payments in QuickBooks also means learning about its different categorization options.

Categorize individual credit card transactions

When it comes to receiving payments via credit card, PayPal, or other payment methods, categorizing individual transactions is the norm. To achieve this, just follow the usual steps outlining how to categorize credit card payments in QuickBooks Online.

As you continue using QuickBooks, it learns to recognize and suggest categories for familiar credit card transactions. You can always adjust these if needed.

Also, keep an eye out for “Match” instead of “Add” on certain transactions. This feature helps avoid duplicates for:

• Pre-existing bills.
• Invoice payments.
• Bank deposits.

All you need to do is verify that the balance matches, then click “Match.”

Learning how to categorize credit card payments in QuickBooks boosts your efficiency and makes learning how to process credit card payments in QuickBooks Online easier.

Split transactions among categories

Sometimes, you may need to divide a credit card transaction across categories.

Imagine you’ve got a receipt for $200, which includes $120 for office supplies and $80 for travel expenses. You can easily split this in QuickBooks Online. Simply allocate $120 to the “Office Supplies” category and $80 to “Travel Expenses.” This way, your financial reports are as accurate as possible to reflect each type of expense.

Here’s how to split transactions among categories:

1. Log into QuickBooks Online.
2. Navigate to “Banking” in the left sidebar.
3. Select the transaction you want to split under the “For Review” tab.
4. Choose “Split” in the transaction details.
5. Enter the accounts separately in the “Category” field.
6. Press “Save and add.”

Image credit: Intuit

Common errors when categorizing payments into QuickBooks

Now that you know how to categorize credit card payments in QuickBooks, let’s identify some common errors and how to avoid them.

Not using the “Split” feature

Failing to use the “Split” feature on credit card statements can result in inaccurate tracking when a transaction spans multiple respective categories.

To fix this, get comfortable with the “Split” function and use it for multi-category transactions. Also, make sure you’ve assigned each transaction to the correct credit card account.

Incorrect account selection

When categorizing credit card payment details, selecting the wrong account leads to issues.

For example, choosing an expense account instead of a credit card liability account results in incorrect transactions and financial statements.

To avoid this, always double-check your account selections to make sure they match the transaction and credit card type, like payment vs. direct expense. Also, ensure that your bank and credit card details are correct to prevent inaccuracies.

Failing to update categories

Failing to regularly review and update your expense categories results in misclassifications.

To ensure accuracy when recording payments, schedule routine checks of your expense categories. This lets you make necessary adjustments as your business shifts over time.

Understanding these common errors is crucial in learning how to process a credit card payment in QuickBooks Online.

Best practices when categorizing credit card payments

As you learn how to categorize credit card payments in QuickBooks, adopting best practices eases your bookkeeping burdens.

Here are some best practices to keep in mind:

• Regularly reconcile: Regularly match your credit card transactions with bank statements for financial accuracy.
• Set up banking rules: Use QuickBooks’ banking rules to automatically categorize bank transactions. This saves you valuable time and reduces manual errors.
• Separate personal and business expenses: Carefully categorize transactions, especially if the same credit card is used for personal and business expenses. This maintains an accurate and comprehensive overview of your financial health for informed decision-making.
• Train your team: Equip your team with the skills to handle transaction details in QuickBooks efficiently.
• Review reports regularly: Use QuickBooks reports to check for any categorization errors.

These best practices are also useful when learning how to process a credit card payment in QuickBooks Online.

How to easily record and categorize credit card payments in QuickBooks Online

To perform credit card payment categorization quick and easy in QuickBooks Online, follow these steps:

1. Log into QuickBooks Online to access your account and manage your credit card purchases and payments.
2. Go to the “Banking” tab in the left-hand menu and select “Banking” to open your linked accounts, including bank feeds.
3. Select your credit card account from your list of accounts. Choose the account where your payment was made.
4. Find the transaction you need to categorize by locating the “For Review” tab and then choosing the transaction you need.
5. Open the transaction, then choose a category:

• Category: Using the “Category” dropdown menu, select one that best describes the nature of the transaction. It could be a category such as Accounts Payable, Office Supplies, or Travel Expenses.
• Memo: Optionally, you can add a memo or specific bank details to clarify the precise purpose of your payment.
• Split Transactions: If the payment covers multiple categories, you can select “Split” to allocate amounts. For example, $100 for office supplies and $50 for travel expenses.

6. Finally, click “Add” to review and confirm the transaction categorization. This will save it to your QuickBooks credit card payment records.

Following these steps is a straightforward process for categorizing credit card payments in QuickBooks, making sure your financial records are accurate and up-to-date.

Alternative methods to categorize a credit card payment in QuickBooks

Create a check

Did you make a credit card payment via check? You’ll need to record this transaction accurately in QuickBooks Online to maintain your financial records. Follow these steps to categorize checking:

1. Log into your QuickBooks Online and access your account.
2. Find the “+ New” button to initiate new banking transactions.
3. In “Business View,” you need to select “Pay down credit card.” 
4. Enter in and specify the amount and date of the payment.
5. Select the bank account from which the payment was made.
6. As the payment was made using a check, here you will now select “I made a payment with a check” and then enter the check number into the corresponding field.
7. (Optional) You can also add a note or attachment to the transaction during this process.
8. Once you have correctly entered all the details, click “Save and close” to record and categorize the check payment.

Reconcile your credit card transactions and make a payment

Keeping your accounts reconciled in QuickBooks online means you’ll have more accurate and up-to-date records across your credit cards and expense transactions. 

To get a more visual step-by-step guide on reconciling accounts in QuickBooks Online and Desktop, take a look at our video tutorial:

Here’s how to reconcile credit card transactions in QuickBooks Online:

1. At the top right corner of your screen, select the gear icon. Under the Tools menu, choose “Reconcile” from the dropdown.
2. In the Account dropdown menu, select the bank account or credit card you want to reconcile.
3. Using the ending balance and date from your credit card statement, fill in the Ending balance and Ending date fields. 
4. Click “Start Reconciling”.

5. QuickBooks will now show you a list of transactions for the selected account. You can compare each transaction in QuickBooks Online with those on your credit card statement.

• If a transaction matches the statement, you can click the checkbox to the right to mark it.
• If a transaction doesn’t match up, leave it unchecked.

6. Now, check for discrepancies. QuickBooks will indicate any differences between your records and the statement. If you find a difference, review the transactions to identify and resolve it.
7. Once all the transactions are matched and discrepancies have been addressed, you can click “Finish now” to complete the reconciliation.

To record a payment for your reconciled credit card:

1. Click “+ New” and then select “Pay down credit card” under the “Vendors” section.
2. Choose the credit card account you have just reconciled and enter the “Payment Amount” and “Date.”
3. Now, you can select the Bank account used for the payment.
4. If the payment was made by check, enter the check number in the field. Or, for electronic payments, you can enter the EFT number.
5. Optionally, you can add a memo or attachment if you need to.
6. Click “Save and Close,” and you will have recorded the payment.

Use banking download

If both your credit card and the bank account you use for payments are connected (through bank feeds), you can easily record the payment by simply transferring it:

Step 1: Transfer the Payment

1. Go to the “Expenses” tab from the menu.
2. Choose the account from which you’ll transfer the payment.
3. Find the transaction, and select the “Pay down credit card” option.
4. Open the Transfer account dropdown, then choose the account to which you want to send the transaction.
5. Click “Confirm” to complete the transfer.

Alternatively, you can record the payment as a transfer:

1. Go to Expenses in the menu.
2. Select the account you’ll be transferring from.
3. Find the transaction, and choose “Record as transfer.”
4. In the “Transfer account” dropdown, pick the destination account.
5. Finally, you can click “Confirm” to save the transfer.

Step 2: Match the Transaction

After transferring, you can match the transaction with the new account:

1. Go to the “Recognized” tab and locate the transaction.
2. In the “Action” column, you should select “Match” to confirm it with the new account.

How QuickBooks users make more sales in less time with Method

Method is the #1 CRM for QuickBooks users. It makes credit card payments in QuickBooks even easier, along with offering several additional benefits.

Method’s two-way, real-time sync with your accounting software reduces manual data entry and keeps your business finances current and up to date. This leads to fewer errors, which frees up more time for activities that add value to your business. It also promotes accurate financial decisions through data-driven insights.

What’s more is that Method’s automation capabilities speed up and simplify your payment process for a better bottom line.

Conclusion: How to categorize credit card payments in QuickBooks

Using QuickBooks’ reconciliation tool to balance your accounts is the best way to keep an accurate recording of your financial records.

By reconciling your accounts, you’ll simplify your financial management and discover valuable insights into your business’ revenue.

How to record credit card payments in QuickBooks FAQs

Is a credit card payment an expense in QuickBooks?

Yes, a credit card payment is typically recorded as a transfer rather than a direct expense when using QuickBooks online. While the charges made on the card are categorized as expenses, the payment itself does reduce the card balance.

How do I enter credit card charges in QuickBooks Online?

To enter credit card charges in QuickBooks Online, you can follow these steps:

1. Select “+ New” then choose “Expense.”
2. Under the “Payment account” select your credit card account.
3. Enter the date, payee, and the amount for the charge.
4. In the category field, choose an appropriate expense category from the dropdown menu.
5. Add any notes, then click “Save and close.”

What kind of expenditure is credit card payment?

A credit card payment is treated as a liability payment in QuickBooks, as it reduces your credit card balance.

Note that QuickBooks doesn’t count credit card balance payments as a direct business expense, but rather as the repayment of borrowed funds.

Is it OK to exclude credit card payments in QuickBooks?

No, excluding payments to credit cards, including partial payments, is not recommended in QuickBooks. Doing so leads to inaccuracies in your financial records and reports.

Recording all transactions, including credit card statements, ensures a complete and accurate financial overview.

See how Method simplifies your credit card payments.

Image credit: Liza Summer via Pexels

As a small business owner, you’ve worn many hats to get where you are today. But there’s one thing that still might have you scratching your head — sales tax.

Paying sales tax gets tricky, especially because you need to be completely accurate in order to: 

• Comply with tax laws.
• Avoid fines.
• Make sound financial decisions.

Luckily, QuickBooks Online simplifies this process. Because the accounting software is designed with small business owners in mind, learning how to record sales tax payments in QuickBooks Online is straightforward.

Keep reading to discover: 

• How to record sales tax payment in QuickBooks Online.
• Why you should set up automatic sales tax.
• The power of sales tax reports in QuickBooks.

Let’s get started!

Different types of sales tax payments in QuickBooks

Sales tax is an additional cost added to the price of goods and services that’s passed on to a governing body.

But not all sales taxes are created equal. Here are the key types of sales tax payments in QuickBooks:

• State sales tax: This is the largest portion of your overall sales tax. It gets paid to the state where your business operates.
• County sales tax: On top of state sales tax, some counties have their own add-on tax. This varies from county to county.
• City sales tax: This is the tax charged by your city or local government. Like county taxes, city sales tax depends on the area. 
• Liability sales tax: Think of this as the total sales tax you collect from customers, including state, county, and city taxes.
• Special sales tax category: You can apply sales taxes unique to your business or industry with sales tax categories in QuickBooks.

Along with tracking payment fees, QuickBooks handles your sales tax payments automatically to ensure: 

• Legal compliance. 
• Operational efficiency.
• Financial accuracy.

How to automatically set up sales tax in QuickBooks

When learning how to record sales tax payments in QuickBooks Online, a great feature to explore is automatic sales tax.

Imagine being free from the burden of manual tax calculations. QuickBooks makes this dream a reality by automatically calculating your sales tax based on: 

• What you sell.
• Where you sell.
• Where your products ship. 

That’s the beauty of knowing how to record sales tax payments in QuickBooks Online with automation!

Here’s how to set up automatic sales tax:

1. Go to “Taxes” in the left-side menu, then the “Sales Tax” setup screen.
2. Choose “Use automatic sales tax” or “Get Started.”
3. Verify your business address and click “Next.”
4. Match your tax rates with the state tax agency by using either:

• “Match one rate at a time.”
• “Match multiple rates at once.”

5. Click “Next.”
6. Enter your filing frequency and click “Save” when finished.

Automatic sales tax simplifies the process of collecting, reporting, and paying your sales tax in QuickBooks. 

No more calculations and risk of errors. QuickBooks ensures you account for every cent of your sales tax.

Setting up sales tax items in QuickBooks

When learning how to record sales tax payment in QuickBooks Online, it’s important to remember that some of your items may have different tax rates.

Let’s say you’re a manufacturer who produces goods and ships them to various regions. In this scenario, your products’ tax rates may differ based on the state or region where you’re selling them.

Fortunately, QuickBooks lets you assign tax categories to specific items. This helps you calculate the correct sales tax rate to add to each product you’re selling.

To apply sales tax to an item on an invoice or sales receipt:

1. Create a new invoice or sales receipt. 
2. Add an item using the “Add products or service” drop-down menu. 
3. Click the checkbox under the “Tax” column for any taxable product or service.
4. Make sure the correct sales tax rate is selected in the tax rate field. 

How to record sales tax payments in QuickBooks Online

With automated sales tax in place, you can dive into learning how to record sales tax payments in QuickBooks Online. Here are some detailed instructions: 

Image credit: QuickBooks

The first step in outlining how to record sales tax payment in QuickBooks Online is to review what you owe:

1. Go to “Taxes,” then “Sales tax.”
2. Check the amount due for the month, then click “View Tax Return.” For older returns, use the “Tax Period Date” dropdown menu.
3. Review and adjust if necessary, using the “+ Add an adjustment” button. This is helpful if you have credits, discounts, penalties, or a correction. 
4. Note down your:
   1. Gross sales.
   2. Non-taxable and taxable sales.
   3. Tax due.
   4. Adjustments. 

Once you’ve confirmed that all your information is accurate, you can proceed with filing your return with the right tax agency. You have two options:

• E-file on your tax agency’s website.
• File by mail.

Here are some steps to guide you through the online process:

1. Visit your tax agency’s website to file your return online. Sign up for your state’s e-filing service if you haven’t already.
2. Complete the sales tax return form using the gross sales, non-taxable sales, and tax due amounts from the previous step for reference.
3. Finish your sales tax return filing.

Note: QuickBooks does not file returns, but you can update your sales tax information by manually entering your payment after filing.

Now that you’ve finished filing, it’s time to record your sales tax payment in QuickBooks.

Here’s how to do it manually and zero out your sales tax payable:

1. Go to “Taxes,” then choose “Sales tax.”
2. Find the recent return and click “View Tax Return.” For older returns, use the “Tax Period Date” dropdown menu to select a specific period.
3. Select a filing method, then click “Record payment.”
4. Enter payment details like the tax amount, payment date, and your bank account.
5. Click “Record payment.”
6. Select “Back to sales tax center.”

Image credit: QuickBooks

The final step in recording your sales tax payment is to check your filing status. If you filed online, go to your tax agency’s website to see if it’s been processed. If you mailed it, call your tax agency to get a return update.

Editing and deleting tax payments in QuickBooks

Even when you know how to record sales tax payment in QuickBooks Online, common errors are still possible. Rest assured, QuickBooks has your back.

If you need to edit a sales tax payment, follow these simple steps:

1. Go to Taxes and select the “Returns” tab.
2. Choose “Tax Adjustment” to open the “Journal Entry” window.
3. Enter the sales tax adjustment and provide a reason for it. You can use a positive or negative amount.
4. Select an appropriate account to track the adjustment link. In case of rounding errors, use an income account for negative errors and an expense account for positive ones.
   1. For credits or discounts, choose an income account like “Other Income.”
   2. For fines, penalties, or interest, select an expense account.

Apart from editing, you may need to delete a tax payment altogether. To do so:

1. Go to “Taxes,” then select “Sales tax.”
2. Choose the payment you want to delete from the “Recent Sales Tax Payments” list.
3. Select “Delete Payment” and confirm by clicking “Yes.”

Making these corrections ensures your financial records remain accurate, which is a non-negotiable for any business.

How to generate a sales tax report in QuickBooks Online

Learning how to record sales tax payment in QuickBooks Online is more than just a task. It’s a way to gain insights into your business’ financial well-being.

One of the best ways to use your sales tax data in QuickBooks is to explore the reporting feature. To generate a sales tax report in QuickBooks Online:

1. Visit the “Sales Tax” screen, where you’ll find sections for each sales tax agency, showing the amount owed and the period covered.
2. Scroll down to view agencies listed at the bottom of the screen. You’ll see due dates, status, and the “Amount” you owe in the column.
3. On the right side, click the “Reports” drop-down menu to access tax-related reports, like the sales tax liability report. This report provides details on your tax obligations, including tax types, amounts, and due dates to ensure you stay on top of your payments.

Sales tax reporting is helpful for planning your next moves. Reports show you how your business is doing financially to simplify decision-making and drive business growth.

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Thanks to its two-way, real-time sync with QuickBooks, Method ensures a smooth and hassle-free experience. From credit card processing to bill payments, Method simplifies your workflow by consolidating all your data into one place. 

What’s more is that the software provides greater control over your sales tax management, resulting in precise financial planning and reporting. With Method, you can focus on growing your business, not your stress.

See how Method makes your sales tax process less taxing.

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Let’s face it — paying bills is a headache for any business owner. From vendor payments to utility bills, it’s a juggling act that requires skill and precision.

The good news is that you don’t have to navigate it alone. With tools like QuickBooks Bill Pay, you’ll ease the burden of bill payments and reclaim valuable time to focus on what you do best. So, how do you use it?

In this blog, you’ll learn all about setting up pay bills in QuickBooks Online, from entering vendor information to recording bill payments. 

Let’s jump in! 

What is QuickBooks Bill Pay?

Image credit: QuickBooks

Before setting up pay bills in QuickBooks Online, let’s explore QuickBooks Bill Pay.

QuickBooks Bill Pay is a built-in payment solution for small business owners using QuickBooks. It integrates bill payments with your accounting software to ensure your financial data is always in sync.

Imagine ditching the tedious, manual work involved in paying bills. That’s what QuickBooks Bill Pay offers with its powerful automation.

You can even schedule payments ahead of time, and QuickBooks will automatically send the funds to help you avoid late fees and credit hiccups. As for vendors who prefer the old-school approach, QuickBooks can also mail a physical check on your behalf.

QuickBooks works with any type of business bill, similarly to its flexibility in receiving payments. This includes bills for merchandising, rent, taxes, and utilities. 

Additional benefits of QuickBooks Bill Pay include:

• Data protection and time savings: Protect your financial data and reduce the time spent on manual payments. That means no more unnecessary bank visits or managing several accounts.
• More control: Take control of your bill payments to help you stay financially organized and improve cash flow.
• One-stop solution: Handle all your bill payments, from vendors to utilities, in one place.
• Simplified compliance and delegation: Track and file 1099 forms easily. Plus, assign team members specific roles for bill payments to enhance security and efficiency. 
• Efficient invoice management: Import invoices into QuickBooks and automate payment schedules. This reduces manual effort and frees up valuable time for you to focus on your business.

Different payment methods with Quickbooks Bill Pay

Now that you’re up to speed, let’s explore two payment methods you can use when setting up pay bills in QuickBooks:

Pay bills with a credit card or cash

QuickBooks Bill Pay gives you the freedom to pay bills using credit cards or cash. This flexibility lets you choose the best payment method for your needs and financial strategy.

Using credit cards gives you extra time before funds leave your account, a plus for managing cash flow. On the other hand, cash payments are great for immediate business expense budgeting.

Pay bills with a check

For those who prefer traditional payment methods, QuickBooks also lets you easily pay bills by check. 

This method is useful for transactions that require physical proof of payment or for vendors who do not accept electronic payments.

Read on to learn how to record bill payments with credit card, cash, and check. By the end, you’ll know precisely how to pay a bill in QuickBooks Online.

How to enter or edit payment information

A great first step when learning how to pay bills in QuickBooks Online is to establish your payment terms and information. 

QuickBooks Bill Pay makes it easy to enter, view, and edit a vendor’s payment details. This means you can confidently keep your payments on track and your vendor information up-to-date. 

To enter or edit payment information in QuickBooks:

1. Log in to your QuickBooks Online account. 
2. In the “Banking” tab, select “Add Account” to connect your bank account. 
3. Click on the “Expenses” tab in the left menu bar. 
4. Under “Manage Vendors,” click on “New Vendor” and enter their information, such as contact details, name, and payment terms. 
5. In “Settings,” select “Account and Settings.” 
6. Go to “Expenses,” then “Bills and Expenses,” and activate “Make payments.”
7. Select “Set up bank transfers” for your vendor, input their bank account info, and fill in the required fields.
8. Click “Save.”

Once you’ve entered your payment details, you’re ready to learn how to pay a bill in QuickBooks Online. 

How to find and manage your unpaid bills

While it’s not as exciting as watching revenue come in, setting up pay bills in QuickBooks also involves tracking and handling your unpaid bills.

Luckily, managing all your bills in QuickBooks Online is a smooth process. In just a few steps, you can view, sort, and pay outstanding bills. This convenient payment processing cuts manual work and helps you avoid any late payment fees.

To find and manage your unpaid bills:

1. Log in to QuickBooks Online.
2. Select “Bills” under the “Expenses” tab. 
3. Use the tabs: “For review,” “Unpaid,” and “Paid” to organize bills. Let’s break them down:

For review

“For review” displays bills awaiting your review, including those from the QuickBooks Business Network.

Clicking “Review” lets you check bill details for accuracy. From there, you have the option to save them under “Unpaid” or schedule them for payment.

Hitting “Save” automatically moves the bill to “Unpaid,” or “Paid” if the amount due is $0.00.

Unpaid

“Unpaid” shows all your bills you haven’t paid yet. You have a few options here.

For one, you can “Schedule payment” using a QuickBooks-connected bank or credit card to easily transfer funds.

If you’ve already made an online payment for a bill outside of QuickBooks, you can click “Mark as paid” to move it to the proper tab.

Finally, the “View/Edit” option lets you see and adjust the bill’s details. Once you’re happy with your changes, you can select “Save” or “Save and schedule payment” depending on the action you want to take.

Paid

The “Paid” tab displays all your settled bills and their linked payments, with the option to view details. This is a great area to monitor and assess your payment history to inform cash flow management and operational performance.

How to schedule bill payments with Quickbooks Bill Pay

A key aspect of setting up pay bills in QuickBooks Online is scheduling payments. This feature keeps your business’ financial commitments in line while removing the hassle of manual follow-ups.

In a nutshell, scheduling bill payments lets you automate your payment process. You can schedule payments days in advance, which is especially useful for recurring payments.

Here’s how you can accomplish this: 

1. Sign in to QuickBooks Online.
2. Go to “Expenses,” then “Bills.”
3. Create a new bill or select an existing bill screen.
4. Choose “Schedule Payment” or “Save and Schedule Payment.”

• For new bills, you can schedule directly with the “Save and Schedule Payment” option.
• To schedule payments for unpaid bills, access the “Expenses,” “Vendors,” or “Bills” tab. This allows you to locate unpaid bills in the system and establish their payment schedules. 

5. Pick a bank account and “Edit” the payment amount if needed.

• To add an account, connect to your bank online or enter its details manually. QuickBooks will send two small deposits to the account within three days for verification. 

6. Select an account from the “Payment account in QuickBooks” dropdown list, or add a new one.
7. Click “Next.”
8. Choose your payee’s preferred payment method (i.e., a bank transfer or print check) and provide the necessary details.
9. Set a “Withdrawal date,” up to 90 days in the future.
10. Click “Next.”
11. Review and confirm the details, then click “Schedule payment.” Use “Back” to edit more or “Cancel” if you’ve changed your mind.

Note: QuickBooks Bill Pay currently only supports payments in USD.

And that’s it! QuickBooks will send you a confirmation email once it completes the payment. 

How to record bill payments in QuickBooks Online

When learning how to pay bills in QuickBooks Online, scheduling and recording bills are two different processes. Scheduling plans for future expenses, while recording keeps track of what you’ve already spent. 

Recording bill payments is crucial for reconciling your accounts. It ensures that your financial records always give a complete picture of your business’ spending. 

Record partial or full payments towards bills

QuickBooks Online lets you record full and partial payments.

For those unfamiliar, a partial bill payment involves paying a portion of the bill now and the rest later. This is quite common in business scenarios, especially when customers are tight on funds.

Making partial payments strengthens your relationships with vendors by fostering good faith. Even when you can’t pay the full bill immediately, regular installments show vendors you are committed to paying what you owe them. Plus, it’s a smart way to distribute your expenses, giving you more control over your cash flow.

QuickBooks offers two easy ways to record payments, depending on if you use:

• Credit cards or cash.
• Check.

Let’s explore each option. 

Paying by cash or credit card

To record cash and credit card payments towards a bill, follow these simple steps:

1. Click “+ New.”
2. Choose “Pay bills.”
3. Select the “Payment account” from the drop-down menu.
4. Optional: If you’re using a checking or savings account, input the “Starting check no.”
5. Enter the “Payment date.”
6. Check off the bills you’re paying.
7. In the “Payment” column, enter the payment amount for each bill. You can apply credit here if available.
8. Click “Save.”

Paying by check

To record check payments towards a bill, follow these steps:

1. Click “+ New.”
2. Select “Check.”
3. Choose the vendor from the “Payee” drop-down menu.
4. Select “Add” to add an open bill to the check. If not visible, click the small arrow near the amount. You can also add credit from the “Credits” section.
5. Select the payment account from the “Bank/Credit account” dropdown list.
6. In the “Amount” field, enter the check amount.
7. In the “Outstanding Transactions” section, choose the bills covered by the payment. Tip: To split the payment among multiple bills, check the corresponding boxes and enter all amounts in the “Payments” column. 
8. If you want, you can print the check here. Once you’re done, hit “Save and close.”

To sum up, QuickBooks Online simplifies bill payments, offering full and partial payment options to manage cash flow and maintain vendor relationships.

Enhance the power of QuickBooks with Method

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What’s more, is that Method’s automation capabilities speed up and simplify your payment process for a better bottom line.

See how Method gets you paid sooner.

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