Important: Direct Deposit for vendor payments is not currently supported for Assisted Payroll users.
Then follow the instructions below to activate Direct Deposit for paying vendors and to set up your vendors to receive direct deposit payments.
STEP 1. 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
- From the Employees menu, choose My Payroll Service > Account/Billing Information.
- In the Direct Deposit section in the lower right of the Account Maintenance window, click Activate next to 1099 Vendors.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 Direct Deposit section.
- Provide your Direct Deposit PIN (the same PIN you use for sending payroll direct deposits).
STEP 2. 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 Direct Deposit Getting Started Guide.
Then you need to update the vendor’s information in QuickBooks.
To do this task
- From the Vendors menu, click Vendor Center.
- From the list on the left, select the 1099 vendor you want to set up for direct deposit.
- Click Set Up Direct Deposit in the Vendor Information section.
- 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.
- Enter the vendor’sbank account information.Where to find bank routing and account numbers
- 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.
- Click OK.
STEP 3. Pay a 1099 vendor by direct deposit
You use Write Checks to pay a vendor by direct deposit. (Pay Bills does not currently support vendor payment by direct deposit.) The vendor must be set up to receive direct deposit payments as described above.
To do this task
- From the Banking menu, click Write Checks. (You must have Checking permissions to write checks.)
- 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.)
- 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.
- In the Confirmation and Next Steps window, click Send to Intuit.
- 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.