Learn How to Process Credit Card Payments in QuickBooks Online

QuickBooks Online is a versatile and robust accounting platform for small and large business owners alike. It allows you to keep detailed records, send invoices, and even receive credit card payments from your customers: an excellent feature for freelancers or those who run most of their business operations from within their own homes.

However, lots of business owners don’t know how to process credit card payments using QuickBooks Online at all, aside from manually entering payments at the end of each day or week. There are much better and more efficient ways to leverage QuickBooks for accurate record keeping.

Today, let’s break down how you can process credit card payments for both invoices and sales receipts using QuickBooks Online. 

Sign Up for a QuickBooks Payment Account

Before you can process credit card payments using QuickBooks, you’ll need to set up a Credit Card Payments Account. This account essentially organizes all the credit card payments for your business into a single location, making record-keeping much easier and assisting with account reconciliation later down the road.

Additionally, QuickBooks Online can use the credit card account to keep customer information, process payments automatically, and more. It’s an invaluable tool if most or even some of your business payments are major credit cards rather than cash or checks.

To set up your Credit Card Payments Account:

  1. Click the gear-shaped icon in the top right-hand corner of the screen
  2. Choose “Account and Settings”
  3. Click “Payments,” which should be on the left-hand navigation bar
  4. You can enter information about your business at this stage, such as its name, address, and more. Enter as much information as you like; the more detailed, the better, since QuickBooks can use this information to keep more accurate records
  5. Enter your business’s bank information at the very end of the process. You’ll need a business bank account number and routing number, both of which can be located on your official business bank account’s checks
  6. QuickBooks is usually quick to notify you if you are approved for a new Credit Card Payments account. Your account should be usable within 24 hours or so

What if you aren’t approved? In this case, you’ll need to call QuickBooks’s customer support to ask about the reason for your rejection. QuickBooks only approves certain industries, so if your industry doesn’t fall within this list, you may not be able to use Credit Card Payment accounts whatsoever.

However, there may also be a simple technical issue, in which case it may be resolved quickly.

It’s beneficial to get a QuickBooks Online Credit Card Payments account if possible. If you have one of these accounts, QuickBooks Online does most of the processing work for you. For example, if you send an invoice, QuickBooks automatically records the transaction and enters the expected amount in its records for your business.

When your customer pays you using a credit card, you’ll get an email automatically notifying you about the payment. Every time you open QuickBooks Online, the transaction will be clearly marked with a “paid” status indicator and a link to the payment so you can review the details at your leisure.

Note that this feature makes keeping detailed records, reconciling accounts, and otherwise keeping track of your expenses and income much easier.

Manage or Adjust Your Payments Account

After creating your account and getting approved, you’ll need to verify the connection to your business bank account and check out its current settings to ensure everything runs smoothly.

  1. Go back to the gear-shaped icon and choose “Account and Settings”
  2. Click “Payments”
  3. You should see your bank account in your QuickBooks chart of various accounts

From this screen, you’ll be able to see the history of all your transactions or change various settings in your QuickBooks Credit Card Payments account. Just click “Manage Account” to see these options.

That button takes you to a separate page that displays your credit card payments and transaction history and allows you to manage any mobile-only users for your account. Additional settings and controls, such as alert preferences and tutorial resources, can be found here as well.

It’s a great page to navigate through, especially if you are using this for the first time, so take some time to get familiar with all these controls. As you become more experienced, you can adjust how QuickBooks enters credit card payments and fine-tune its performance. If you have an accountant for your business, they’ll also be able to use these tools to great effect.

Processing Credit Card Payments Through Invoices

QuickBooks Online allows you to process credit card payments that count toward invoices or through sales receipts. There are two different processes for either option.

If you invoice your customers, you’ll often receive payments via credit cards. To receive payments toward invoices:

  1. First, click “New+”
  2. Then click “Receive Payment” or “Receive Invoice Payment” depending on your version of QuickBooks
  3. Then fill out any pertinent customer information or payment date information. This will help QuickBooks organize the data after it has been entered
  4. Go to the “Outstanding Transactions” section and choose an open invoice to apply the received payment toward
  5. If you want to take a partial payment for the invoice, simply change the value located in the “Amount Received” field. Otherwise, QuickBooks defaults to assuming the payment is for the full value on the invoice
  6. Choose the “Payment Method” drop-down menu and click “Credit Card”
  7. Then enter the details of the credit card you’ve been given. You can alternatively select “Swipe Card”. Note that at this point, you can save the customer’s credit card information by selecting “Use this credit card in the future”
  8. Choose “Process credit card”, then “Save”, then “Save and close”

There you have it! QuickBooks has now processed a credit card payment toward one of your invoices. You can do this repeatedly if you have more than one invoice you are waiting on payments for.

Creating Sales Receipts

What if your business doesn’t use invoices? In that case, QuickBooks also allows you to process credit card payments using sales receipts. To do this:

  1. Click “New+,” then “Sales Receipt” or “Make a Sale” depending on your QuickBooks version
  2. Fill out the customer information, so QuickBooks can organize this info for later
  3. Add the product or service you have sold to the customer
  4. Click the “Payment Method” drop-down menu and click “Credit Card”
  5. Then enter the credit card details, or choose “Swipe Card.” As with processing credit card payments through invoices, you can choose “Use this credit card in the future” if you want to save a customer’s credit card information
  6. Click “Process Credit Card,” then “Save,” then “Save and Close” 

Having Customers Store Bank or Credit Card Information

In many cases, businesses with regular clients or customers find it easier to store customer information, such as bank account numbers or credit card information, in their QuickBooks accounts, so they don’t have to add credit card information over and over manually.

This is an excellent idea. QuickBooks Online and its Credit Card Payment accounts are both PCI compliant. This guarantees high-quality security for both parties in the transaction, and it also masks all but the last four digits of credit card information numbers.

QuickBooks allows you to store Visa, MasterCard, and Discover credit cards. You can also store bank routing and account numbers. However, QuickBooks isn’t always the best with keeping track of which numbers belong to which clients. So keep detailed records to prevent any mix-ups. 

But note that you can store more than one card or account per customer at a time. Still, this can be a useful tool if your business frequently includes transactions with clients or customers who usually pay you using a primary account or card.

Summary

In the end, processing credit card payments using QuickBooks Online is pretty simple once you practice it a few times and go through the process manually. QuickBooks’s tutorials can help to fill in any gaps if you have questions after the breakdown above.

Again, we recommend signing up for a QuickBooks Credit Card Payments account if possible. These accounts make processing credit card payments much easier and QuickBooks takes more of a direct role in organizing the information from each payment, minimizing the time and effort you have to spend entering and reconciling this financial data.

Want to know more about how to use QuickBooks to its maximum effect, or need assistance getting loans or other help for your business? In either case, Seek Capital can help. Contact us today or check out our extensive guides on QuickBooks and other financial tools now!

 

Sources:

PCI Compliance Guide Frequently Asked Questions | PCI DSS FAQs

25 Invoicing Mistakes to Avoid in Your Small Business | Forbes

Difference between an invoice and a sales receipt | Quickbooks

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