QBO QuickBooks ® FedNow ACH

Integrating ACH and FedNow for Account-to-Account (A2A) transfers into QuickBooks Online (QBO) and QuickBooks can streamline the payment process and enhance cash flow management for businesses. Here’s how you can achieve this:

Integration Steps

1. Select a Payment Processor:
   • Choose a payment processor that supports both ACH and FedNow transactions. Examples include banks, financial institutions, or third-party payment gateways like Stripe, Plaid, or Square.
2. Connect Your Bank Accounts:
   • Ensure your bank accounts are linked to QuickBooks. This will allow you to manage transactions directly within the QuickBooks interface.
   • In QBO: Go to Banking > Link Account and follow the prompts to connect your bank account.
3. Set Up ACH Payments:
   • Use a payment processor that offers ACH integration with QuickBooks. Some processors provide built-in support for ACH payments within QuickBooks.
   • In QuickBooks Online, you can enable ACH payments for customer invoices through Sales > Customers > Edit Customer > Payment and billing.
4. Set Up FedNow Payments:
   • Since FedNow is a newer service, ensure your payment processor supports it.
   • Integrate FedNow by using the API provided by the payment processor or financial institution.
   • Work with a developer or your payment processor to create a custom integration that connects FedNow’s real-time payment capabilities with your QuickBooks system.

Integration Points

1. Vendor Payments:
   • Use ACH for scheduled vendor payments.
   • Use FedNow for instant, real-time vendor payments when immediate payment is required.
2. Customer Invoices:
   • Enable ACH payments to allow customers to pay invoices directly from their bank accounts.
   • Implement FedNow to offer instant payment options for customers who need to settle invoices immediately.
3. Payroll:
   • Use ACH for regular payroll processing.
   • Consider using FedNow for urgent payroll corrections or for gig economy workers who need immediate payment.

Differences in Implementation

ACH Integration:

• Transaction Speed: ACH payments take 1-3 business days to process.
• Batch Processing: Transactions are processed in batches, which might require scheduling payments in advance.
• Cost: Typically lower transaction fees, suitable for recurring payments.

FedNow Integration:

• Real-Time Transactions: Payments are processed instantly, providing immediate fund availability.
• 24/7/365 Availability: Payments can be made anytime, even outside regular banking hours.
• Cost: Potentially higher fees due to real-time processing, suitable for urgent payments.

Detailed Steps for QuickBooks Integration

QuickBooks Online (QBO):

1. Connect Payment Processor:
   • Go to Apps in the left-hand menu.
   • Search for your payment processor app (e.g., Stripe, Plaid).
   • Follow the instructions to connect your payment processor to QBO.
2. Enable ACH Payments:
   • In Sales, go to Invoices and select an invoice.
   • Click on Receive Payment.
   • Select Bank Transfer (ACH) as the payment method.
3. Enable FedNow Payments:
   • Custom integrations will likely be needed. Work with your payment processor to integrate their FedNow API.
   • Set up a webhook or API endpoint to handle FedNow transactions and update QuickBooks records in real-time.

QuickBooks Desktop:

1. Connect Bank Accounts:
   • Go to Banking > Bank Feeds > Set Up Bank Feed for an Account.
   • Follow the prompts to connect your bank account.
2. Set Up ACH Payments:
   • Use a third-party ACH service that integrates with QuickBooks Desktop.
   • Follow the service provider’s instructions to set up ACH payments.
3. Set Up FedNow Payments:
   • Implement custom integration through the QuickBooks SDK or a third-party service.
   • Work with your payment processor to ensure real-time payment data is synced with QuickBooks.

Monitoring and Reconciliation

1. Transaction Monitoring:
   • Regularly monitor ACH and FedNow transactions within QuickBooks.
   • Set up alerts or notifications for incoming FedNow payments to ensure real-time updates.
2. Reconciliation:
   • Use QuickBooks’ reconciliation tools to match transactions with bank statements.
   • For FedNow, ensure that the instant transactions are correctly recorded and reconciled immediately to maintain accurate cash flow records.

By integrating ACH and FedNow into QuickBooks, you can streamline payment processing, enhance cash flow management, and provide flexible payment options to your customers and vendors.