QuickBooks (QB) is one of the most sought-after software of QuickBooks lineage. This software has garnered much popularity due to its many benefits like
- Easy access from anywhere and anytime.
- Accessible from any gadget – smartphones, tabs, Android and iOS
- Much tighter Data Security.
- Auto Update –The user does not have to update the software to the next version manually.
Another best feature is that most of the new features incepted by Intuit are first hosted in QuickBooks. The same is the case with a feature called Direct Deposit. The direct deposit option for QuickBooks Payroll allows users to directly transfer the salary and other incentives of the employees in their accounts. This feature at present is available in the Beta version for QuickBooks. Get download or print Intuit QuickBooks Direct Deposit Form
- 1 Before You Set Up and Run QuickBooks Payroll Direct Deposit
- 2 How to Setup Direct Deposit for Employees QuickBooks
- 2.1 1. First Step: Open the Employees section
- 2.2 2. Second Step: Specifications for paying the Employee
- 2.3 3. Third Step: Complete Authorization from the Employee
- 2.4 4. Four Step: Store Employees’ Documents
- 2.5 5. Five Step: Update Company’s Information
- 2.6 6. Six Eight: Verification
- 3 Infographics: How to Set Up Payroll Direct Deposit in Quickbooks
- 4 FAQs
Before You Set Up and Run QuickBooks Payroll Direct Deposit
If you’ve run payroll through QuickBooks before, direct depositing requires a few extra steps. Here’s what you need to set up direct deposit:
- 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 make a direct deposit. If you’re new to QuickBooks, it’ll prompt you to make a direct deposit while you’re in the process of setting up payroll.
How to Setup Direct Deposit for Employees QuickBooks
1. First Step: Open the Employees section
Click on the Employees tab and under this section select the edit button against a particular employee. Now go to the 6th point asking “How do you want to pay your employee?” For this select the option stating ‘Paper Checks’.
2. Second Step: Specifications for paying the Employee
Now provide specifications regarding the method through which the company will forward the paycheck of the employee. At times the employee could want to direct a part of their check to a savings account.
However, the employer can only transfer the salary directly to a savings or chequing account type. TFSA or RRSP transfer can be performed in the next step that too only by the employee from their bank or credit union.
Before proceeding to the next step choose the appropriate option from below as per your preference:
- Paper Check
- Direct Deposit
- Direct Deposit to 2 Accounts.
- Direct Deposit with Balance as Check.
3. Third Step: Complete Authorization from the Employee
Now type in the required employee information and garner his authorization to start up a Direct Deposit account for either both Chequing and saving or for any one of them.
4. Four Step: Store Employees’ Documents
Along with a filled form of authorization (in either electronic or paper form) for Direct Deposit, store other imperative documents in the permanent file of the employee like an employment contract, correspondence, and approval for vacation pay per pay period.
5. Five Step: Update Company’s Information
To complete the Direct Deposit process, the employer needs to provide complete and authentic details of the company. Once the banking details of the employee are entered, click on the Done tab. Now the next step will be to enter relevant information regarding the company’s bank account details not only the company’s account but also for the knowledge of the principal officer to complete the process for the 1st employee. The good news is that this step is needed only once and not again for every further employee.
Note: After the completion of 5th step, all the steps from 1 to 4 needs to be repeated for each and every employee.
6. Six Eight: Verification
After the completion of the whole process for all employees, the user will have to wait for the verification process to get over. A proper risk analysis is performed which can take up to 3 days to get completed.
The user will be asked to approve for a certain amount to be transferred from your account, less than $1.00, to test the activeness of the bank account. To view the status of the process, click on the Payroll Settings tab in the top right corner and select the Direct Deposit option.
Now under the Employees list the user can see Employee’s Payment Method which will fluctuate between Direct Deposit and Pending to Direct Deposit. Once the approval is received, Pending will be removed automatically.
- In case the paychecks are generated based on a time sheet, the user should review the data collection timing along with the timing for payment. Also, determine whether the cut-off is amended needed to create paychecks on time.
- It is imperative to activate this method of Payroll much in advance to complete the verification process in time so that the employees can receive their salary on the correct date.
- Ensure proper review of finances is done as funding of the payroll two days prior can lead to bumping in a smooth transfer of salary due to a shortage in the cash flow.
Get Started With Related QuickBooks Payroll Questions:
- I’m an Old User of QuickBooks Payroll 2014, Recently I Bought Apple Mac. Do I Need to Purchase New Payroll for QuickBooks Mac or Is There Method to Use Old QuickBooks Registration Keys?
- How do I write annual bonus checks for my employees that are specific from the regular payroll?
Infographics: How to Set Up Payroll Direct Deposit in Quickbooks
How do I edit an employee’s direct deposit information?
You have to modify the employee’s bank account details before you create a paycheck for him/her. Paychecks that are issued before one changes the account details of the employee will be directly deposited into the old bank account.
Before sending them to Intuit, you may remove and reform the paychecks to prevent this by following the steps below:
💠 The very first, open your paycheck
💠 Next, go to the Paycheck Detail window
💠 After that, uncheck the option named “Use Direct Deposit”
💠 And then, select the Save & Close option after clicking the Save button
💠 And finally, try to open a paycheck once again and select the Use Direct Deposit then Save button.
How do I remove Direct Deposit permanently from the profile of the employee?
You can remove the direct deposit from the setup for not paying the employee.
💠 Initially, go to the Employees and then choose the “Employee Center”
💠 Select the employee to which you want to edit by double-clicking on the name
💠 Next, go to the tab named “Payroll Information”
💠 Now, hit the “Direct Deposit” option
💠 At last, the box named “Use Direct Deposit” should be unchecked for that particular employee.
Does my account have limits if I pay with direct deposits?
Yes, your account does have a limit on the amount of money that you send with direct deposit to protect against fraud. But if you are running a larger than normal payroll for things like pay raises, and bonuses, then you can request an increase.