- Setting up QuickBooks Payroll Direct Deposit makes payroll efficient.
- Most employees prefer and receive payroll through direct deposit.
- Using QuickBooks Payroll Direct Deposit will save you time and money.
- This article is for business owners and accountants who want to process payroll through QuickBooks Online.
Once you've set up payroll in QuickBooks Online, setting up payroll direct deposit is easy. Business owners and employees alike benefit from direct deposit. This is beneficial for businesses as there is no lag in time for bank reconciliation purposes, and it is great for employees as they receive payments immediately without having to go to the bank to deposit cheques.
Businesses benefit from direct deposit in several ways:
- You have more control over payroll processing and expenses.
- Direct deposit is a paperless payroll process, saving the time and expense associated with printing checks.
- Direct deposit payments are on time.
- Your employees receive payment even if they are out of the field.
- There is no lag in check cashing, which means that bank reconciliation is simplified.
- This reduces the risk of fraud and lost or stolen checks.
Before Setting Up and Running QuickBooks Payroll Direct Deposit
If you've run payroll through QuickBooks Online before, direct depositing requires a few extra steps. Here's what you need to set up the direct deposit amount:
- the name of your bank or financial institution
- Your bank's routing number
- your account number
- The names of your employees' banks or financial institutions
- Routing numbers of your employees' banks
- Account numbers of your employees
Once you have these items, you can set up a direct deposit. If you're new to QuickBooks Online, it'll prompt you to make a direct deposit while you're in the process of setting up payroll. [Read related article: Payroll Alternatives to Direct Deposit]
If you're processing payroll in QuickBooks Online but printing paper checks, start by going to Settings and then selecting Payroll Settings.
did you know? Payroll and accounting are closely intertwined processes. If you're in the market, check out our picks for the best accounting software for small businesses.
How to Set Up Direct Deposit with QuickBooks Online
If you haven't yet set up payroll with QuickBooks Online, do so first. You should also complete the following tasks:
- Make sure your business information is complete.
- Prepare everything you need to pay your team.
- Make sure your tax information is accurate.
If you have completed these actions, green checkmarks should appear in QuickBooks Online.
FYI: According to a 2019 “Getting Paid in America” survey, more than 93% of American workers receive their paychecks via direct deposit.
Once you have completed the above steps, do the following steps to enable direct deposit.
1. Select Start and connect your bank.
In QuickBooks Online, select StartThen connect your bank, Next, choose get started, This will open a new window allowing you to verify the information you have already entered.
If you are a sole business owner, you are probably the principal officer of the company. QuickBooks Online asks for information about the company's principal officer, such as legal full name, Social Security number, date of birth and home address.
After providing the basic offer of your company, find your bank below add a new bank, Once you've found and selected your bank, then manually key in the routing number and account number you want to have payroll funds.
QuickBooks Online allows you to link your bank account by signing in to your bank for verification.
After you've linked your bank account, add a personal identification number as another means of keeping your account secure. QuickBooks Online will send a small deposit to your account for you to verify. Your bank will list this credit as “Intuit: Verify Bank” or “QuickBooks: Verify Bank.” The deposit amount will be less than $1.
You will then receive a verification email confirming the deposit amount. After doing this your account will be verified. If you don't receive the email, you can log in to your QuickBooks Online account and verify the deposit. ObservationThen lets goThen Check your account for small deposits,
2. Ask each employee to complete an authorization for direct submission form.
Once you've verified your bank account with QuickBooks Online, the next step is to manually input your employees' information. Print the authorization for direct submission form and ask each employee to fill it out. Keep these forms on file either digitally or physically.
Each completed direct deposit form must be accompanied by a void check. This provides you with routing numbers and account numbers for all employees so that you can enter them into QuickBooks Online for direct submission.
Here's how to access authorization for a direct deposit form in QuickBooks Online:
- click on taxes and forms,
- Choose Employee and contractor setup,
- Choose authorization for direct deposit,
- Choose bank verification and then Opinion,
After completing the steps above, you can print copies so that your employees can fill them out. Most small business owners prefer to have all employees sign up for direct deposit, as it makes payroll more efficient and eliminates the need to print checks for some employees.
Looking for a paperless payroll option? QuickBooks Direct Deposit is trusted by 1.4 million businesses to handle processing payroll.
3. Enter the banking information of the employees.
The next step is to enter the banking information of your employees. go to employees tab. If you already have employee information in QuickBooks Online, you can simply select each employee and click Set-up To enroll them in direct deposit.
If an existing employee is missing from the list, click add an employee, From here, you can enter employee information, such as name, date of birth, hire date, salary type and any tax details.
Under each employee, there is an option to How do you want to pay? next to the employee's name. If your payment method is direct deposit, select that option.
Once you have selected the direct deposit option, enter the employee's banking information. don't forget to choose What happened after inserting it.
4. Pay your employees through QuickBooks Online Direct Deposit.
After entering all of your employee information into QuickBooks Online and adding your bank account, you can process payroll via direct deposit.
QuickBooks Online Payroll Direct Deposit is a popular option.
QuickBooks Online gives you the ability to process direct deposit on the same day or the next day, while other software may require two to four days' advance notice. This means you can process payroll the same day the funds are credited to your employees' accounts.
QuickBooks Online also offers add-on options for payroll; However, it depends on how many employees you have. The ability to choose the right payroll package for you means you don't have to buy services you don't need. QuickBooks Online also allows you to add or remove services based on the needs of your business.
did you know? QuickBooks Payroll is one of our best picks for payroll software. Read our QuickBooks Payroll review to learn more, or check out our guide to choosing a payroll service to determine the best option for you.
Direct deposit is a benefit for employers and employees alike.
Paying employees through direct deposit is beneficial to both businesses and their employees. It gives employers control over the processing of payroll, minimizing expenses and ensuring timely deposits, while employees receive payments no matter where they are. In addition, it helps in bank reconciliation and helps eliminate fraud and lost or stolen cheques. QuickBooks Online makes it easy to process payroll via direct deposit.
If you are looking for the best payroll software, QuickBooks Online might be the right choice for you. Check out some of our other best picks like our Paychex Payroll review, our ADP payroll software review, and our review of OnPay payroll software.