Mastering QuickBooks ACH Vendor Payments with Stampli
A lot of money flows through the automated clearing house, or ACH, with around $62 trillion moving via these transactions in 2020, according to industry estimates. For context, that’s roughly two-thirds of the global GDP, which was estimated at just shy of $94 trillion in 2021.
It makes sense businesses would use ACH so often. It’s cost effective, reliable, secure and makes it so that people don’t have to manually cut paper checks and instead, enjoy the ease of money being electronically deposited into their bank accounts. With the ACH being a preferred method for businesses in recent years to send and receive payment, it’s smart for companies to quickly get up to speed on what they need to do in order to make ACH vendor payments through solutions like QuickBooks Desktop or QuickBooks Online.
Join us as we explore the basics and benefits of QuickBooks ACH vendor payments and how Stampli can help facilitate them.
The Basics of QuickBooks ACH Vendor Payments
When we talk about QuickBooks ACH vendor payments, we’re essentially talking about three things: accounting software, the automated clearing house, and using them in tandem to pay vendors. Here are some basics to be mindful of.
A Quick Overview of QuickBooks
Founded in 1983, QuickBooks is software that helps businesses with their accounting. Many businesses will use QuickBooks to run payroll, as it can automatically compute deductions like Social Security, Medicare, and unemployment, as well as state and federal tax withholdings. QuickBooks is also popular for, among other uses: invoice creation; bill and expense tracking; and printing of financial statements, including profit and loss reports.
QuickBooks remains a fairly ubiquitous name in accounting, particularly useful for small and medium-sized businesses for its flexible design and UX. QuickBooks can also be very affordable for ACH transactions, with QuickBooks Online charging 1% of invoice fees and maxing out at just $10 per ACH payment. Meanwhile, QuickBooks Desktop’s “Pay as You Go Plan” charges a flat rate of $3 per ACH transaction, with a monthly option adding a $20 subscription fee but cutting rates for credit transactions.
All About ACH
The ACH or automated clearing house emerged in the United Kingdom in the late 1960s and hit the market in the United States a few years later. A news article from September 1972 predicted that computerized payments might replace paper paychecks, noting, “The automated clearing house concept is expected to produce substantial savings for both banks and employers while not increasing what the consumer pays for his checking account.”
Today, the ACH is hugely in demand, with 26.8 billion payments made by it in 2020, representing a two billion payment growth. Governments turned to the ACH to get stimulus payments out during the early stages of the COVID-19 pandemic. The ACH is also how many workers get paid, with over 94% of employees receiving their paychecks via direct deposit, which typically uses the ACH.
Similar to QuickBooks, one of the reasons businesses like the ACH is its affordability. The fees are generally a fraction of what it costs either payer or payee to make a wire transfer, credit payment, or paper check transaction. This matters more than people might think, with a 2021 study by Stampli and Treasury Webinars, “How & Why Companies Choose Payment Types” finding that 46% of businesses preferred specific payment types due to processing costs.
How to Make QuickBooks ACH Vendor Payments
Intuit, which markets QuickBooks, details an eight-step process for bill payment its website. The steps are:
- Selecting “Pay Bills” through the Vendors menu;
- Choosing the correct AP account from a dropdown menu;
- Selecting checkboxes from a table for all bills that need to be paid;
- Applying discounts or credits to bills, as necessary;
- Setting the date to pay the bill;
- Choosing to pay via ACH or check and having vendor bank routing information ready;
- Hit “Pay Selected Bills”;
- Either hit “Done” or “Pay More Bills.”
Users can learn and follow these steps, which can require manual invoice entry if the company lacks a plug-in application for automated data entry. Or users can opt for an add-on such as Stampli Direct Pay, which allows businesses to seamlessly pay bills in whichever manner they’d like.
3 Benefits of QuickBooks ACH Vendor Payments
From the popularity of the ACH to affordable transaction fees to reliability, here are a few benefits of QuickBooks ACH vendor payments.
1. The ACH is Popular with Companies and Vendors
Approximately 7.1 billion payments were sent through the ACH in the first quarter of 2021, representing an 11.2% increase from the first quarter of 2020, according to a National Automated Clearing House Association statement at the time of the news. “While these have been some of the most challenging times we have seen, the modern ACH Network has again shown itself to be not only resilient but industrial strength,” Nacha President and CEO Jane Larimer said in the statement.
Both companies and vendors make regular ACH use. Stampli and Treasury Webinars found in their payment study that 24% of companies preferred to pay their suppliers with the ACH, as opposed to 36% with credit cards, 30% with checks, and 4% with virtual or ghost cards. Meanwhile, 37% of companies were choosing bill payment methods due to supplier preference, suggesting that when a vendor likes the ACH, there’s a good chance companies will take this to heart.
With the shift from paper to digital payments steadily underway in recent years, it’s possible the ACH might become even more desired with businesses and their suppliers as the benefits become better understood, particularly the next one here.
2. It’s Cheaper Than Other Forms of Vendor Payment
Want to arrange a wire transfer? It might cost as much as $50. Want to send a paper check? Technically, it’s free, though there are a range of hidden costs to consider, from the extra staff time needed to process a check to lost income while a company waits on a paper check to arrive. In fact, Stampli and Treasury Webinars found in their payment study that check processing costs can top $20 more frequently than other major payment types.
On the other hand, ACH fees can be literal pennies on the dollar, generally 1% of transactions and topping out at $10 in QuickBooks Online. This means that it costs less to make an ACH transaction through QuickBooks Online than paying a vendor through PayPal or Square, each of which charge processing fees of 2.9% of invoice value plus $0.30 per transaction.
There will of course be times that a company wants to pay a premium on transaction fees, such as that $50 it might spend on a wire transfer for a multi-million dollar deal. Companies might also be tempted to pay via credit to extend due dates for the sake of cashflow. In normal times, though, there seemingly isn’t a cheaper way for companies to pay their vendors or suppliers than the ACH.
3. Doing it in QuickBooks Ensures Payments Won’t Be Lost
It’s pretty well-known at this point that the United States Postal Service is struggling, with the Washington Post reporting in February 2021 that “the agency had an on-time rate of 38 percent for nonlocal mail.” Items have been going missing as well, with no guarantees that cutting a check to a vendor means it will ever get to them in the mail.
In such a climate, it’s smart for businesses to make other payment arrangements. QuickBooks ACH vendor payments help ensure that vendors will get their invoices paid promptly. For companies, QuickBooks helps keep important payments from being delayed or vanishing altogether.
That being said, QuickBooks on its own might not be enough to ensure an expedient invoice approval process. Here’s why to look to an AP automation partners such as Stampli to integrate with QuickBooks and maximize the investment.
Using Stampli to Make QuickBooks ACH Vendor Payments
Why would a company want to add an AP automation solution like Stampli to make QuickBooks ACH vendor payments? Here are some reasons to consider.
Why QuickBooks On its Own Might Not Be Enough
As noted earlier, companies that use QuickBooks still need to find a way to get their invoices into the system. They might opt for an invoice scanning plug-in. Or they might stick to simply having their accounting staff manually key in invoices, rationalizing that it’s not that much of a hassle in exchange for all of the other benefits the company assumes that it’s getting with QuickBooks.
Manual accounting processes simply have too many bottlenecks, from tedious three-way matching of invoices, receipt reports, and purchase orders to approval requests not automatically routing to company higher-ups.
On the other hand, AP automation can make for much easier QuickBooks ACH vendor payments, as everything that leads up to the point of payment in accounts payable can move much more smoothly. Different metrics attest to this. Among them, a 2021 study that Stampli did with Treasury Webinars, “The How, the Why & the ROI of AP Automation” noted that 57% of companies saw faster invoice approval, while 36% experienced lower processing costs, and 27% had smaller late payment fees.
Stampli: An Essential Add-On for QuickBooks ACH Vendor Payments
Many different AP automation providers can be found on the market these days. Things that set Stampli apart include its use of AI and machine learning for invoice data entry, three-way matching, resolving invoice exceptions, among other things.
Payment can also be much easier with Stampli than with alternative AP automators. Some other companies in the field can be restrictive, forcing businesses they work with to pay bills in select ways. But companies will have no problem making QuickBooks ACH vendor payments with Stampli, as Stampli Direct Pay is payment agnostic, allowing companies to pay bills however they’d like.
Stampli’s Quickbooks Compatible Checks
There’s more for companies that prefer checks but don’t want the hassle of cutting, signing, and mailing checks. Stampli Direct Pay streamlines check processes as by printing and mailing paper checks from your bank account directly to your vendors, so there’s no question about where the check payment came from.
Easily Integrate Stampli with QuickBooks
Whether your company is using QuickBooks Online or QuickBooks Desktop, Stampli can integrate easily. With either solution, Stampli can easily sync vendor lists and general ledger account information. We can also quickly sync QuickBooks bills, payment information, and links to Stampli bills.
No matter if your company is a 20-year QuickBooks user thrilled with that solution or just using it until the time you can implement a custom-built enterprise resource planning (ERP) tool, Stampli can help your business enjoy a smooth and cost-effective ACH payment process.
Making ACH payments easy for QuickBooks users. Try Stampli Direct Pay today.
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