Quickbooks ACH payments issues and How to work around them

Issue 1 : Quickbooks ACH payments take around 5–7 days to reach the bank !

I found the below issue being listed by someone from the QB community and realized that most businesses does not understand how ACH payments work through third party processors such as QuickBooks, Stripe , PayPal etc. works

Direct ACH Vs Quickbooks ACH

How Quickbooks ACH works

When a customer enters their bank account information on the payments page on QB ( bank account number and routing information) Quick books sends an instruction to its bank to pull money from your customers bank on your behalf.This is achieved by sending an NACHA file to Quickbook’s bank (Read more about ACH files here)

Once the ACH instruction is processed by the bank the money from your customers account is moved to Quickbooks account. QuickBooks receives millions of such transaction every day and hence will need to have a program that maps each such incoming transaction to the final bank account to which the money needs to go.Once your customers money reaches Quickbook’s bank account , Quickbooks will again send a credit ACH instruction to push money to your bank account(seller).

Each ACH transaction hop would take 1–3 days including reconciliation. The total transaction time then turns out to be 5 -7 days (mentioned on Quickbooks website ).For a brief period your customer would say that money has moved out of their bank but the payment would still be with Quickbook’s bank account until Quickbooks initiates a new instruction to push the money to your account

Why direct ACH is the solution

It’s imperative for businesses doing single transactions worth more than 10,000 USD to cut down this time to a bare minimum as their money gets tied up for this period and for a small to medium business cash flow can affect your businesses ability to grow.

Direct ACH

The solution for this would be to setup a direct ACH connection with your bank

In the case of a direct ACH connection a 3rd party software provider (such as PayorCRM) would send instruction to your bank on your behalf every day.Once the bank gets the instruction they will pull the funds directly from your customer’s account to your account.The net result being your funds are available within a day in your account.

Setting us direct ACH is a simple process and most banks provides this service by default for all business accounts.Please find the below links of some major banks providing this service

How to setup Direct ACH with PM

Setting up Direct ACH integration with the bank will require working with your bank to setup the link and usually takes around 1 week.Talk to us at solutions@payorcrm.com how to start of this process

issue 2 : Quick-books doesn’t support recurring ACH payments !

Quickbooks ACH payments doesn't allow recurring payments

Recurring ACH transaction or Automated Bank Drafts

Another gap w.r.t to Quick books ACH payments processing is related to recurring or automated payments

Recurring payments and Automated payments :

Even though Quickbooks allows the option of creating recurring invoices they unfortunately do not provide the option to setup recurring ACH payments for those invoices .

To be able to setup recurring payments you would need to use a external software such as Payorcrm that could pull invoices periodically and automatically debit them based on conditions . For eg: Autodebit on due date , Autodebit all invoices at the end of the month etc

Talk to us at solutions@payorcrm.com to know how to let customers setup Automated payments / recurring payment instructions to pay off outstanding invoices raised by you.

Originally published at PayorCRM.