 QuickBooks Online 2023 QuickBooks Payments Overview Get ready to earn the skills needed to boost your bank books on up with QuickBooks Online 2023 Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course Each course then organized in a logical reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. QuickBooks Online Payments is basically an add on feature within QuickBooks Online adding a banking features integrated within QuickBooks Online, primarily geared at giving customers more payment options while simultaneously integrating and in some cases automating some of the transactions within the sales process. For example, it might have an impact on invoices, sales receipts, receive payment and deposits, possibly also helping us with our tracking of accounts receivable and more easily constructing our financial statements from the financial transactions that being the balance sheet and the income statement. So we're going to start out listing some of the benefits, then we'll go into some of those benefits in more detail. Some of the benefits of QuickBooks Online payments include help accept payments faster, providing payment options on invoices, automates the receive payment process, batches and automates deposit for easy bank reconciliation, possibly provides mobile payment possibilities, can send a payment link instead of an invoice, you can automate reoccurring sales receipts. For example, if you have a subscription model may be able to connect to e-commerce or such as a Shopify or other related types of systems. Let's go into some of these items in more detail now starting with help accept payments faster, providing payment options on invoices. This is probably the first thing that we think of when we think of the QuickBooks payments, which is we would like to be able to send out our invoices and be able to give them options to pay us as easily as possible. Because the more payment options they have, the more likely whatever payment option they are most comfortable with, they will pick and possibly be able to send our invoices or get our payments faster because of those added payment options. Now, obviously there could be fees with different kind of payment options will get into the downside and the fees related to it in a future presentation. But this is one of the major things that we would first come to our mind. Can we send out an invoice and have them basically click on it and have a bunch of payment options so they can pick their preferred payment options so that the turnaround on the invoice is going to be faster. So we get our money sooner and possibly also build confident with the customer because we're allowing them to pay us in whatever way they feel most comfortable doing so. So you got the ACH, which is an automated clearinghouse. This is basically the system used for the electronic funds transfer. So in other words, if they want to pay from a transfer from their bank, they may have that option. They've got the credit cards and I think basically all the major credit cards are there visa mastercard discover American Express. They've got the PayPal option. So some people really like their PayPal and are using it like a checking account. So that could be quite useful to some people same with the Apple pay. Some people are quite comfortable with Apple pay. It's an easy thing for them to do if we can send them an invoice and say pay us through Apple pay or PayPal or credit card. Whatever they're comfortable with and we have multiple options. It's likely that the turnaround on our invoices will be faster and that will make it easier for our accounts receivable tracking and that'll be better for our cash flows. That's one of the first things that come to mind. They also have the Venmo. OK, so next we have the Automate to Receive payment process. So when you actually send out an invoice to a customer now, you oftentimes when you think about accounting in like a textbook situation, we think of like a paper invoice and now we're in the digital area. We think about maybe an emailed invoice or something and then they still send us a payment. However, they're going to send us it, but it would be nice. Of course, if we can send them that automated invoice, possibly in an email with the link, allowing them all the payment options that they can do from that point. So that's basically what we have here because we've integrated our banking system within QuickBooks so it can more easily kind of integrate that within the invoice. So now we can kind of automate the whole the whole process on the email. So when they get the email, they will typically have something that looks something like this where they can pay the invoice. Once they hit the pay the invoice, they can generally select the payment options that they think are that they're most appropriate to them, which which they prefer. And that's the benefit. They have that variety of the payment options and the invoice can be used to just turn around and facilitate the payment much more easily. So batches and automates deposit for easy bank reconciliation. So on the bookkeeping side of things. Now, now we have the fact that we're sending out the invoice with an with an email and we gave them multiple ways to pay us through through the link because we're basically using the banking services within QuickBooks. The QuickBooks payments is basically giving us a banking facility like a checking account. Right. So now we're going to be able to track the information that's that's going from the the invoice that we're going to be tracking, which means we're going to track the accounts receivable, which hopefully we don't have to track as long because they're going to pay us faster. And then when they pay us, we should be able to track that with the QuickBooks payments because we basically have like a checking account integrated within QuickBooks through their QuickBooks payment options, which hopefully allows us to automate the payment processes a little bit faster. So payments automatically generate receive payment form linked to the appropriate invoice. We'll take a look at some examples of this in future presentations, what the normal process looks like and how this automated process may be able to simplify it. But once we receive the payment, usually if I got a check, I would have to manually input the received payment. But if I use this automated process, because QuickBooks is linked to the banking services, they might be able to record that transaction for us. Payments are bashed and recorded into the bank account in a format that makes bank reconciliation easy. Let's take a look at this on a flow chart. Now this is the desktop flow chart. We're talking about QuickBooks online, not the desktop, but the desktop homepage has this nice flow chart. And so let's kind of compare the process if we had QuickBooks payments versus if we did not have QuickBooks payments with the sales part of this flow chart. So when we do work, we typically will then send out an invoice and hope to receive payment on the invoice. Or if we did work at the same point in time, we might create like a sales receipt. That's the form you can think of if you're at like a cash register, for example, at like a restaurant. But let's think about the invoice. We did work. We're invoicing the client. We're sending our invoice, which is a bill to them. And normally we send it out and we've been able to, even if we don't have payments set up in QuickBooks, we can email them the invoice and then they would have to pay us somehow. Either they can send us an electronic transfer some other way, we can give them a way to give us an electronic transfer through PayPal or something like that. Or they send us a check or we have some other payment option that's not linked directly within the invoice with the QuickBooks payments, right? They pay us in some way, shape or form. And when they do, then we're going to record the received payment at that point in time. Now, when we have the received payment, there's an issue here sometimes depending on the different ways that they pay us. So if they pay us with just an electronic transfer, if we have some batching system like a credit card, if they paid us with a credit card, we might be collecting multiple payments from the credit card before the credit card then deposits it into our bank. And so we have this problem of batching because once it hits the bank, I want to be able to reconcile the bank account to what is in our system, the bank statement to what's in our system. And if the batching from here, if I have multiple things that got deposited together at one time, it's going to show up on the bank statement as one lump sum, which creates a reconciliation problem. And that's can be an issue depending on what your sales cycle looks like. So usually we put the money into undeposited funds, you could put it or into a clearing account payments to deposit, and then you group the deposits when you make the deposit in the same format that you expect to see them on the bank statement. Now, if you have the integration of QuickBooks payments, that process could be easier, right? Because now you send out the invoice and then when they pay us, QuickBooks may then just record the receive payment on its own, not only that, but because we're using the QuickBooks bank account, if they're batching the deposits and they're going to put the deposits in our system as a lump sum of some kind, they will properly batch out the deposits and deposit them properly so that we have deposits that will match the amounts that are on the bank statement. So that could be a huge deal, depending on the kind of complexity that you have in your receivable cycle. So we'll go into some examples of that in more detail, but that can be quite nice from the bookkeeping side, so we might dive into that in future presentation. You have the mobile payments. So obviously it's great to be able to get paid as easily as possible. So you might have these mobile payment tools that you can use in the phone or with this other card swiper. If you have a more sophisticated type of system, you can have the card swiper and that allows you to get paid. Faster possibly, send a payment link. So this is going to be an option we saw about we saw an option or an example where we send out an invoice. Maybe you don't want to send out an invoice. Maybe you just because you don't want to track the accounts receivable. Do you expect them to pay you immediately very quickly? Then instead of sending out the invoice, you might just say, I'll just send you a link, a payment link, which you might be familiar with. Like if you were to send out a payment link from some other platform or something like a PayPal or something and you're trying to get them to just pay you really quickly with a payment link. So you can send out the payment link and instead of a full invoice. So you can make a link for payment and that'll be like a URL. They will automatically expire after customer pays you. So the URL will be for a limited amount of time and will expire after they pay you. So it's so it's just a one time type of link down and dirty quick link. If you expect them to pay you soon, that's usually when it's going to be useful. If you're giving them a long period of time to pay you, then you're going to want to give them just a normal invoice. So to give customers more time to pay the full invoice with online payment options would be best can send the link with email or possibly text the link. So a cool thing about the link is that once you have the link, you could send them an email with the link on it. But maybe everybody's on their phone. So you might be able to text a link more easily than you would be able to text like an invoice. So that might be an easier way to facilitate the payment. There's a down and dirty link. You just want to text and pay. We'll just send you a text to the link if that's what you want. So can you can also make or code to scan. I'm sorry, a QR code so you can make the link into a QR code. If you're quite high tech or you're dealing with someone that's quite high tech that wants to scan. And pay the link with their phone customer will go to a landing page where they can pay you. So obviously what happens with the link. If you're familiar with any of these payment kind of options, oftentimes you if they click on the link, they're going to have to go to a secure landing page in essence where they will be provided the payment options, which is one of the big benefits of the QuickBooks online payments. As we said, giving and providing those different payment options. The paid payment link will create a sales receipt. So you might be thinking, what is this going to do in QuickBooks if I don't make an invoice? Well, the link is basically means you're going to get paid at that point in time. And therefore instead of having an invoice, you're just going to enter the sales receipt, the form typically used when you enter something like at a cash register situation as opposed to when you do the work first and then bill the client. We might take a look at examples of these and future presentations. So next we have the automating recurring sales receipts. So you might have a situation where you have like a subscription model, for example, and you're saying we're just going to bill these people every month. Well, in order to do that, you could make an you could try to schedule invoices to send out each month and try to do that. But if you can get the agreement from the client for them to just simply pay you so you don't have to go through the invoicing and the accounts receivable process, you can just set up an automatic payment. That would be great. So you might be able to automate a model for the automatic payments, which would be a great system for a subscription based system. So you don't have to go through the billing process every month. So maybe able to connect to e-commerce like Shopify. Now, this probably isn't the first thing that that should kind of come to mind. You would think when you're thinking about the QuickBooks payments. But when you think about an e-commerce store and you're selling like inventory on us on another place at a store, then typically what happens is you're going to have to have some kind of payment processor to get then the information into the QuickBooks. So if you have Shopify, you might have Shopify payments that can help to facilitate different payment options like a credit card or a PayPal or whatever the payment options or you might have a different one like a PayPal, which is another integrated option, providing more options to the customers to be able to pay you. So you may be able to integrate something like the QuickBooks payments in order to help that process out as well. But usually with these e-commerce stores, it's not really it's not really the payments isn't the main thing that often kind of solves a lot of the problems. It's going to be it's going to be with trying to track the inventory that becomes an issue as well as trying to pull in the sales data from the Shopify store. So QuickBooks has other integrations actually within QuickBooks that you can do that to try to integrate your e-commerce store like a Shopify or an Amazon or an eBay and then you can pull in basically the sales data. When you're looking at the payment processor portals, then oftentimes your main goal might be just simply to have the least cost, you know, for the for a portal that provides basically the most the most options at the same time. So so you might want to do if you're thinking about integrated it into an e-commerce, you might want to make sure you do some comparing with that and try to make sure you're you're looking at what are the problems that you're trying to solve with the e-commerce and what are the costs of the different tools within the e-commerce. We have a whole nother course or section on e-commerce if you want to dive into that more so you could take a look at that. So then let's look at some of the downsides, of course, with the add on feature is the fees. Now, now this is the fee structure currently on the QuickBooks website. Things could, of course, change as time passes. You might talk to a pro advisor and get basically a different or or better fees possibly. But the general idea, of course, is that you are providing the ease of payment to the customer, but there's typically going to be a cost with the different kinds of payment options that they that they might be selecting. So notice in practice, then you might be saying it depends on the kind of business as to how you're going to try to be facilitating payments from customers. If you have a lot of repeat customers, then you might try to do your best to come up with a system where they pay you in a way where the fees are lowest so that you you're benefiting best between your transactions and the third party isn't benefiting. In other words, if I do a lot of business with a particular customer, then I might say, hey, look, it would be easier for me. I'm not going to get hit with charges if you pay me with if we have the same bank, maybe an electronic transfer would would have a lesser of a fee than some other kind of ways. Or maybe if they use PayPal and you use PayPal or something, it might maybe you have lesser fees or possibly even a check would be lesser would be lesser fees in some cases possibly. However, if you're dealing with new clients and or you have a lot of different clients where you don't have a lot of repeat transactions, but you have a lot of one off transactions, and your goal is is to try to try to influence or get your sales pitch in front of as many clients as possible. Then what you want is to facilitate the ease of the sale or the turnaround, the completion of the transaction as easy as possible. And that often is the case where you have, like I say, a lot of sales to a lot of customers where you don't have a lot of repeat business possibly or you're not working exclusively with them. You're not doing custom jobs with them. You're providing them this just goods and you're trying to build confidence without as much personal interaction with them. And those cases, oftentimes it might be worth it to give them as many payment options as possible and have as high tech and and professional a feel as you can, right? So in those cases, you want to send out the invoice and say, Hey, look, I'm going to give you any payment option that you want that you feel most comfortable with. And you're going to, of course, have possibly fees related to those. So there's different fees, depending on the kind of payment they choose. So you got the ACH bank payments one percent here, invoices, invoiced the card reader and then the keyed when you actually kind of punch in the information in one way shape or form. So again, if you're diving into the fee structure, you might want to, you can, you can research it at any given point in time so that you get the current fees. And you might want to talk to like a QuickBooks pro advisor to see if they have any discounts possibly on on the fees as well. Also notice the fees are basically structured here mainly when you're facilitating the transaction. So they're taking a piece when the transaction is being facilitated. So you might have, you might be thinking, do you have options then to be able to for certain clients, possibly try to try to set up certain payment options, which have less fees if you do a lot of repeat business with them and you have built trust with them and so on. And for other clients where situation might be worthwhile to incur whatever fee depending on on the whatever payment option is being chosen. Okay, so apps to facilitate accepting payments. So you could have apps that can help to kind of integrate with this. The two main apps that we might look at in a little bit more detail in future presentations are the QuickBooks online app and the GoPayment app. So first, let's take a look at the QuickBooks online app. This is basically just your QBO app. So QuickBooks online is a cloud based software. Now I typically do my work on my desktop on it, but because it's cloud based, they have the cloud based app and you can do your work on your phone. So this is basically QuickBooks modified to work well on basically a mobile phone. Therefore has all the functionality for the most part of just normal QuickBooks. It's not there, in other words, just to facilitate the receipt of payment. It's got everything you need. So this is the app that you might have if you're the owner of QuickBooks or administrator of QuickBooks. And in that case, you might be able to receive customer payments where you usually need to enter the customer name and options for transactions to add classes or custom fields. In other words, when you make a sales transaction, you might be using classes, which is an add on type of feature to better classify your income statement or custom fields. And you have more functionality to do that with the full QuickBooks online application than with the GoPayment app. So the GoPayment app is basically just for the payments now. So now you've got an app designed just to help facilitate getting the money, you know, from the customer, which might be good for the owner, but also might be good for an employee or someone, a salesperson or something like that, where you don't want to give them your full QuickBooks online app. You want them to just be able to collect payments that are going to go into our QuickBooks account, right? So basically use just for customer payments. So you got the sales receipt and payment. You may not even need a customer name, so you might be able to enter a pretty basic format in order to receive payment to get paid. Just enter the product or service or a dollar amount may be used by a sales agent who is not the owner or bookkeeper. So so that might be a system that is set up for like employee type of situation where you'd have to set them up in your in your QuickBooks system, set up the go pay and then you can give them connectivity possibly so that they can collect payments, of course, which would be great.