Using a QuickBooks Process Unconventionally

Laura Granito, DMS Management Solutions

by Laura Granito, Senior Accounting Manager

Recently I’ve had several clients who have had to deal with scammers getting access to their bank accounts or to their mailed checks. One such situation was a client who had issues with scammers stealing their checks, changing the vendor name and dollar amount, and cashing them. It happened with multiple checks and although they were able to get their money back, it was very frustrating that it continued to happen when they sent out checks. This client uses Quickbooks Online and bank feeds.
My client worked with their banker who suggested using the bank’s ACH batch processing system. Unfortunately, the ACH batch comes through as one line item through the QBO bank feed – and the client had to match multiple transactions in QBO to one ACH withdrawal from the bank feed. We wanted to use a similar feature that Undeposited Funds does for customer payments and deposits. We tried it with the client and it worked: we entered an Expense, selecting the payee, then selecting Undeposited Funds for the payment account and ACH for the payment method (you can add this method if it is not in the list), then select the appropriate category and amount. This way we are able to maintain the payee for 1099 purposes and we checked the 1099 report detail and these ACH vendor payments come through on the report. The next step is to go to the Bank Deposit process, select the type that have Expense and Payment Method of ACH. This creates a negative deposit that will equal the ACH batch in the bank feed and will show as a match to the negative deposit. This process will only work in Quickbooks Online.
The result: my client is happy with QBO, happy with the bank, and happy that scammers can no longer steal and cash their checks!