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Pay vendors by direct deposit

To pay 1099 vendors (sometimes referred to as independent contractors) by direct deposit, you must first be subscribed to the Direct Deposit service and have it already activated for paying employees. How?

Then follow the instructions below to activate Direct Deposit for paying vendors and to set up your vendors to receive direct deposit payments.

Activate Direct Deposit for paying vendors

Once you have Direct Deposit activated for paying employees, you can activate it for paying 1099 vendors.

To do this task

  1. From the Employees menu, choose My Payroll Service > Account/Billing Information.

  2. In the Direct Deposit section in the lower right of the Account Maintenance window, click Activate next to 1099 Vendors. (For Assisted users, this link is in the Bank Account Information section in the upper right.)

    Important: You are not asked for a company bank account since direct deposit payments to vendors are drawn from the same bank account you use to make payroll direct deposits. This is the bank account shown in this section.

  3. Provide your Direct Deposit PIN (the same PIN you use for sending payroll direct deposits).

Set up a 1099 vendor to receive direct deposit payments

Before you can pay 1099 vendors by direct deposit, you need to notify them and collect their bank account information. You can use the same sample forms used for employees, which are included in the Go online Direct Deposit Getting Started Guide.

Then you need to update the vendor's information in QuickBooks.

To do this task

  1. From the Vendors menu, click Vendor Center.

  2. From the list on the left, select the 1099 vendor you want to set up for direct deposit.

  3. Click Set Up Direct Deposit in the Vendor Information section.

  4. In the Direct Deposit window, select the Use Direct Deposit for checkbox. This checkbox serves as a preference setting; whenever you pay this vendor, QuickBooks assumes that you want to pay by direct deposit.

  5. Enter the vendor's bank account information.

    Where to find bank routing and account numbers

  6. If you want Intuit to send an email notification to the vendor when the payment processes, select the checkbox and be sure that the email address shown (which comes from the vendor's account information) is valid.

  7. Click OK.

Pay a 1099 vendor by direct deposit

You use either Write Checks or Pay Bills to pay a vendor by direct deposit. The vendor must be set up to receive direct deposit payments as described above.

Pay a vendor by direct deposit using Write Checks

To do this task

  1. From the Banking menu, click Write Checks. (You must have Checking permissions to write checks.)

  2. Click the drop-down arrow on the Pay to the Order of line, and select a vendor who is set up to receive direct deposit payments.

    QuickBooks marks the check as a Direct Deposit check and checks the Online Payment checkbox. QuickBooks also supplies a check date that is two banking days in the future. Although you can change this date, remember that Direct Deposit checks must be sent to the Direct Deposit service by 5:00 p.m. (Pacific time) at least two banking days before the check date.

    Important: When you select a vendor who is set up to receive direct deposit payments, QuickBooks supplies a QuickBooks account entry (for the Bank Account field) that matches the real bank account you specified when you set up your Direct Deposit service (for both payroll and vendor payments).

    You can change the QuickBooks account for accounting purposes, but direct deposit funds are always drawn from the actual bank account shown in the Direct Deposit section of the Account Maintenance window. (To see the Account Maintenance window, choose Employees > My Payroll Service > Account/Billing Information.)

  3. Complete the check and click Save & Close or Save & Next.

    When you click Save & Close, QuickBooks reminds you that you must send the direct deposit transactions to Intuit for processing.

  4. In the Confirmation and Next Steps window, click Send to Intuit.

  5. In the Send/Receive Data window, click Send to send payment transactions.

    If you also have Payroll permissions, both vendor payment and payroll transactions are sent. If you don't have Payroll permissions, only vendor payment transactions are sent.

Pay a vendor by direct deposit using Pay Bills

To do this task

  1. Go to the Vendors menu and click Pay Bills. Shortcut

    (You must have Purchases and Accounts Payable permission to enter and pay bills and to send them to the Direct Deposit service.)

    What if I don't see all my bills?

    • If you don't see the bill you want in the Pay Bills window, it might be because you still need to enter the bill in QuickBooks.

    • If you have entered the bill, and you selected the "Show all bills" option in the Pay Bills window, you might need to scroll to find your bill.

    • If too many bills are listed, you can narrow down the entered bills by selecting Show bills due on or before and specifying the due date for the bill, or a later date. For example, if the date in the field is May 1, any bills due after May 1 will not be listed. To list a bill due on May 5, you must enter May 5 (or a later date) in the field.

    • If you still don't see a bill you entered:

      1. Go to the Reports menu and click Vendors & Payables.

      2. Click Transaction List by Vendor to see if the bill has already been paid.

  2. If you have more than one accounts payable account, choose the one that you want to use to pay these bills.

  3. Select the bills you want to pay.

    You can change the order in which the bills appear in the list by choosing one of the Sort Bills by options, or you can filter the list so that only vendors marked for payment by Direct Deposit appear.

    What if I just want to pay part of a bill?

    To pay only part of a bill now, find the bill in the list and enter the amount to pay in the Amt. Paid column.

  4. Set any discount or credits that you want to apply to the bill.

  5. Click the Payment Method drop-down arrow and choose Direct Deposit.

  6. Click the Payment Account drop-down arrow if you need to change the QuickBooks account for the payment.

    Important: When you select a vendor who is set up to receive direct deposit payments, QuickBooks supplies a QuickBooks account entry that matches the real bank account you specified when you set up your Direct Deposit service (the same for both payroll and vendor payments). You can change only change the Payment Account to another QuickBooks account that is associated with this real bank account.

    Direct deposit funds are always drawn from the actual bank account shown in the Direct Deposit section (or Bank Account Information section, for Assisted users) of the Account Maintenance window. (To see the Account Maintenance window, choose Employees > My Payroll Service > Account/Billing Information.)

  7. QuickBooks automatically enters a date two banking days in the future in the Payment Date field. This is the date that will appear on your printed checks. Remember that Direct Deposit checks must be sent to the Direct Deposit service by 5:00 p.m. (Pacific time) at least two banking days before the check date. You can change the date if necessary, but the date you enter must be at least 2 and no more than 45 days in the future and must be a valid banking day.

  8. Click the Pay Selected Bills button to record the bill payment.

    The Payment Summary window opens to show the bills you successfully paid.

    The Payment Summary window is displayed after you click Pay Selected Bills in the Pay Bills window. It shows you the bills that you successfully paid and provides easy access to pay more bills or print checks.

    Look over the information in this window to see if you need to take any further steps.

    To print checks

    If your payment method in the Pay Bills window was a check to be printed, a Print Checks button is displayed in the Payment Summary window.

    1. Click Print Checks to display the Select Checks to Print window.

    2. Select the check (or checks) you want to print, and click OK.

    To find or change a bill payment

    You can find your bill payments in the Vendor Center, and edit them if necessary.

    1. Find the bill payment.

      1. Click the Vendors icon.

      2. If you know the vendor's name, select the vendor on the Vendors tab, then click the Show drop-down list and choose Bill Payments.

        Otherwise, click Bill Payments on the Transactions tab to get a list of bill payments for all vendors.

      3. (Optional) Use the Filter By and Date drop-down lists to narrow down the set of bill payments displayed.

      4. Double-click the bill to open it.

    2. Make the necessary changes to the payment.

    3. Save the bill payment.

    To send Direct Deposit payments

    If your payment method in the Pay Bills window was Direct Deposit:

    1. Click Send Direct Deposit to view the payments that are queued to be sent to the Direct Deposit service.

    2. Click Send to send them.

    If you don't want to send the direct deposit transactions now, you can view and send them later by choosing Send Direct Deposit from the Vendors menu.

    Note: You must have Purchases and Accounts Payable permission to send direct deposit transactions.)

    To send online payments

    If your payment method in the Pay Bills window was Online Bank Pmt, QuickBooks sent the payment instructions to the Items to Send list in the Online Banking Center.

    When you're ready to send the online vendor payment instructions:

    1. Open the Online Banking Center.

      Go to the Banking menu and click Online Banking, and then click Online Banking Center.

      Note: The Online Banking Center command is available only when you have at least one QuickBooks account enabled for online banking.

    2. Click Go Online.

    Why are some payments listed in bold?

    If a payment is listed in bold in the Payment Summary window, it means the bill was paid entirely with discounts or credits. You will not be able to find a bill payment transaction for such bills. You can, however, view the bill's transaction history to see the discounts and credits. You might want to let your vendor know that you paid with discounts and credits.

    To view the bill's transaction history

    1. Find the bill.

      1. Click the Vendors icon.

      2. If you know the vendor's name, select the vendor on the Vendors tab, then click the Show drop-down list and choose Bills.

        Otherwise, click Bills on the Transactions tab to get a list of bills for all vendors.

      3. (Optional) Use the Filter By and Date drop-down lists to narrow down the set of bills displayed.

      4. Double-click the bill to open it.

    2. Click the History button at the top of the Enter Bills window.

    To let a vendor know that you paid a bill entirely with discounts or credits

    Print a Transaction History report:

    1. Find the bill.

      1. Click the Vendors icon.

      2. If you know the vendor's name, select the vendor on the Vendors tab, then click the Show drop-down list and choose Bills.

        Otherwise, click Bills on the Transactions tab to get a list of bills for all vendors.

      3. (Optional) Use the Filter By andDate drop-down lists to narrow down the set of bills displayed.

      4. Double-click the bill to open it.

    2. Go to the Reports menu and click Transaction History.

    To pay bills that weren't processed

    On rare occasions, the Payment Summary window might indicate that there was an error recording a particular payment. In such a case, QuickBooks stops processing all the selected bill payments after the payment in error.

    1. Click Pay More Bills. Shortcut

    2. Record the bill payments again.

    See also

  9. Click Send Direct Deposit to view the payments that are queued to be sent to the Direct Deposit service.

  10. Click Send to send the payments.

To print copies of checks for bills you've paid by direct deposit, go to the File menu, choose Print Forms, and then click Checks.

See also

KB ID# H_PAY_DD_VENDOR
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QYPPRDQBKSWS06 9102 Pro 2013 5d722b