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Setting Up Direct Deposit to Employees direct through bank

I found some instructions online in order to set up a "Bank Direct Deposit" deduction of 100% of Net Pay which goes directly into "Direct Deposit Liabilities", however we're trying to figure out how to pay these liabilities as EFTs directly to employees. I expect we have to set up the employee information as payee's with the bank.

Is there an easier way to create a payroll clearing account to export a report which we can then upload to TD Online Banking for direct deposits? I'm not sold on Telpay being the ONLY option.

I'm using Quickbooks Premier+Payroll 2016 (Canada)

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Best answer 03-11-2019

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Established Community Backer ***

Here is how I do it: I set up a Bank Type account in QB a...

Here is how I do it:

I set up a Bank Type account in QB and name it Payroll Clearing. The Net Paychecks that will be EFT (ACH) are "From" this account. Now payroll clearing is Negative a total.

In my bank's ACH site, I create a recurring Template listing everyone participating with their routing and account info. I log in and update the values with the current Takehome pay and initiate. This is the same total = I made no typos.

In QB, that Total is an entry as a Transfer, from Real Checking to Payroll Clearing. This matches the statement activity for Real Checking and Payroll Clearing = 0.

21 Comments
Established Community Backer ***

Here is how I do it: I set up a Bank Type account in QB a...

Here is how I do it:

I set up a Bank Type account in QB and name it Payroll Clearing. The Net Paychecks that will be EFT (ACH) are "From" this account. Now payroll clearing is Negative a total.

In my bank's ACH site, I create a recurring Template listing everyone participating with their routing and account info. I log in and update the values with the current Takehome pay and initiate. This is the same total = I made no typos.

In QB, that Total is an entry as a Transfer, from Real Checking to Payroll Clearing. This matches the statement activity for Real Checking and Payroll Clearing = 0.

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Thank you qbteachmt for this response. I suspect this is...

Thank you qbteachmt for this response. I suspect this is the case but with the "fake" Payroll Clearing Bank Account, when we get to the "Print Cheques" part of processing payroll, we print the cheques, but don't actually Print the cheques correct, they just sit in our print queue until we "Remove from print queue"?
Established Community Backer ***

"when we get to the "Print Cheques" part of processing pa...

"when we get to the "Print Cheques" part of processing payroll, we print the cheques, but don't actually Print the cheques correct, they just sit in our print queue until we "Remove from print queue"?"

No, you don't need to Print Checks. There is no Check to print. You issue Paystubs but not Checks.

You are overlooking the "assign Check #" step. In QB US, it is part of the first screen for payroll. Do you want to Print these, or Assign Check #s, and then you get a little fill-in-the-blanks, where you can put DD1, DD2, etc.

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Re: Here is how I do it: I set up a Bank Type account in QB a...

So you are MANUALLY keying the DD entry into the bank account for each employee?  You aren't uploading some type of file (i.e. .csv or nacha)?

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Re: "when we get to the "Print Cheques" part of processing pa...

In Quickbooks Online, when we get to the part where we assign check numbers in the blanks, we try to enter DD1 or DD2 etc for the direct deposit checks, but we get an error message that we cannot use letters or decimals for check numbers, only numerals.  Is there a setting somewhere that we can change to allow this?

QuickBooks Team

Re: "when we get to the "Print Cheques" part of processing pa...

Hi NorthFarm, 

 

At this time, you'd have to use numbers only. I recommend taking advantage of the memo field by adding any additional info you feel may be useful. You can send feedback about this to our engineers by clicking the gear icon and looking for Feedback. New product improvements are largely based on the feedback we get from other users like you. Let me know if you have questions. 

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Re: "when we get to the "Print Cheques" part of processing pa...

Are you saying DD1, DD2, like those are the check numbers and they will just continue on.  Like for example the next payroll will start at let's say DD72?  

Also, since the payroll is in the Payroll Clearing account, then do you create a CSV report to upload to the bank?

QuickBooks Team

Re: "when we get to the "Print Cheques" part of processing pa...

Hi there,

 

You can use numerical cheque numbers. It's important you make sure you're not using a duplicate cheque number. To ensure this, click the gear icon > Account and Settings > Advanced > Other preferences > and make sure "Warn if duplicate cheque number is used".  Could you elaborate on what you mean by a CSV report? 

Not applicable

Re: "when we get to the "Print Cheques" part of processing pa...

My bank said I need a Nacha file or I can upload a CSV file for them to do my Payroll Direct Deposit for my employees.  I'm pretty sure I can't go the Nacha file using QB so they said they needed a CSV.

QuickBooks Team

Re: "when we get to the "Print Cheques" part of processing pa...

From what you're describing, it sounds like you're using QuickBooks Online's payroll service to calculate your payroll, but then the bank is the one doing the direct deposit outside of the program. Is that correct? If so, I'm wondering if you've considered setting up payroll direct deposit right through QuickBooks Online payroll. That way, you wouldn't have to worry about pulling a file from the program to give to the bank.

 

Considering what a Nacha file is, I have a feeling what the bank wants to see requires a fairly specific structure, even for a CSV file. It is possible to export reports as CSV files, so it may be worth running a few to see if they're what the bank is looking for.

 

I hope that helps!

Not applicable

Re: "when we get to the "Print Cheques" part of processing pa...

No, I don't use QB Online.  I use QB Premier Edition on my desktop.  My bank charges $20.00 per month for Direct Deposit.  QB charges $1.75 per every check.

Not applicable

Re: "when we get to the "Print Cheques" part of processing pa...

Is it legal to charge the employee the $1.75 fee

QuickBooks Team

Re: "when we get to the "Print Cheques" part of processing pa...

Thanks for clarifying what product you're using. QuickBooks Desktop's direct deposit service is handled by a company called Telpay, like the person who originally posted mentioned. The rate you're describing sounds like it may be from a different service. For your reference, here's the overview for using Telpay with QuickBooks Desktop: Payroll Direct Deposit for QuickBooks. The charges are based on the service offered.

 

As for getting the file type you need for your bank, QuickBooks Desktop also allows you to export various reports as CSV files. Again, I'm not sure what exact formatting you need for this and I want to make sure you find what you need. For that reason, I recommend touching base with our phone support team so you can go over the specifics with them. They can be reached at 1-877-772-9158. Premier support is available 24/7. Learn more about support policies here: Intuit QuickBooks Desktop software support policies

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Re: "when we get to the "Print Cheques" part of processing pa...

Thanks for getting back to me.  Regarding the rate I quoted of $1.75 per check, this was within QB Payroll upon clicking Direct Deposit.  It was a service of QB.  Telepay is less expensive but the lead time is quite a bit, like a minimum 2 days.  I have between 50 and 80 employees and only a few are salary.  Getting that payroll info to them in their timeframe will be tough.  I still wish to pursue a CSV directly to our bank.  There would be no wiring or transferring of funds and they only need the payroll by 2pm for the next day direct deposits.  It also is a flat fee of $20.00 per month, quite a bit less than Telepay.  I will call the number you provided to research further.

QuickBooks Team

Re: "when we get to the "Print Cheques" part of processing pa...

Sounds like a plan. I want to make sure you're set up with a service that works best for you. I know deadlines can sometimes be tough to meet, so I encourage you to go with whatever gives you the best options. I also encourage you to go over what you were seeing when you clicked Direct Deposit with our agents as the only Direct Deposit service available in Canada for QuickBooks Desktop is through TelPay. The agent will be able to offer more clarification.

 

Have a great weekend!

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Re: "when we get to the "Print Cheques" part of processing pa...

I am not in Canada.  Someone else in the thread may have been, but not I.

QuickBooks Team

Re: "when we get to the "Print Cheques" part of processing pa...

That make sense. Where are you located and what regional version of the program are you using? Is it Desktop US? As we're in the Canadian part of the QuickBooks community, the number and information I've given you is for the Canadian version of the program and Canadian support. It's important you get connected with the proper team, so please let me know.

Not applicable

Re: "when we get to the "Print Cheques" part of processing pa...

I am in Branson, Missouri, U.S.A. and am using QB Premier Edition 2019

QuickBooks Team

Re: "when we get to the "Print Cheques" part of processing pa...

Got it! Similar to the link I gave you earlier, here's the Contact Us page for the US teams. They'll be able to answer any questions you have about QuickBooks Desktop Payroll Direct Deposit for the US. Here's a link as well to the US community: https://quickbooks.intuit.com/community/US-QuickBooks-Community/ct-p/community-us. Although there are many similarities between QuickBooks Desktop Canada and US, there are distinct differences such as these that make it important to be asking your questions in the right channel.

 

All the best!

Not applicable

Re: "when we get to the "Print Cheques" part of processing pa...

Thanks a lot.  Don't know how I ended up in a Canadian thread.

QuickBooks Team

Re: "when we get to the "Print Cheques" part of processing pa...

Not to worry. These things happen!