I love QBO (QuickBooks Online). New stuff just arrives. Once again, I am surprised and delighted by QBO! Direct Deposit is here, without any fanfare. It’s been introduced as a Beta for customers to start using right away! I’ll bet you are wondering how easy is it to pay employees with Direct Deposit via QBO Payroll?
These six simple steps, and three tips and tricks are all you need for Direct Deposit production!
1. Visit the Employees tab to answer a question for one employee. Select an employee to edit and answer: “How do you want to pay your employee?”. The Direct Deposit question will be found at #6.
2. Specify how your company plans to pay the employee’s next paycheque. It’s possible your employee wishes to re-direct part of their paycheque towards savings. It’s only possible to deposit directly to a Chequing or Savings type of account. Transfers to a TFSA, or an RRSP would need to be made in a separate step initiated directly by the employee at their own bank or credit union. Choose from the list of options below:
3. Obtain authorization from the employee, and enter information to set up the deposit(s) for Chequing and/or Savings type accounts.
4. Store the employee’s completed authorization form for direct deposit in your employee’s permanent file, (either paper or electronic) along with their contract for employment, correspondence, and authorization to pay vacation pay each pay period:
5. Update your company’s banking information to facilitate direct deposit. Once you enter the banking information for the first employee and click “Done”, you will be asked to add the banking details for the company account; and for the principal officer’s information, in order to complete the process. This step will only need to be done once, when completing the first employee signup:
Once that’s completed, go back to complete Steps 1 through 4 for each employee you wish to set up on Direct Deposit.
6. Now the last step, wait for verification. Risk analysis is being performed, and it may take up to three days. You’ll be asked to agree for a small amount to be transferred from your bank account (under $1.00) to test your account; and to verify identification by email or fax. To view status, visit the Payroll Settings (top right gear) to find Direct Deposit under Payroll:
The Employees list shows the Employee’s Pay Method, and it will switch from Direct Deposit | Pending to Direct Deposit (Pending on the far right column, disappears when approval is received:
Ready, Set, Go… Run payroll and choose Direct Deposit!
Tips and Tricks?
- If paycheques were based on timesheets, review timing of data collection and payment timing. Decide if it’s necessary to amend cut-off to allow time to generate paycheques on time (subject to Employment Standards rules for your province/territory) (this step may help with financing tip #3).
- Activate payroll several days in advance to allow for bank processing so employees are paid on time.
- Review finances, as funding payroll two days earlier may require a one time bump in permanent financing to cover any cash flow shortfall.