05.23.23 - Handling Issues with QuickBooks Payments

Michelle and Dan discuss the common (and sometimes uncommon) concerns that can come up when people use QuickBooks Payments to accept credit cards and bank transfers directly inside of QuickBooks.

QB Power Hour is a free, biweekly webinar series for accountants, ProAdvisors, CPAs, bookkeepers and QuickBooks consultants presented by Michelle Long, CPA and Dan DeLong who are very passionate about the industry, QuickBooks and apps that integrate with QuickBooks.

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Transcript

Michelle Long: 0:30

Welcome everybody to another QB Power Hour. We're very glad to having you join us today. Our topic today is handling issues with QuickBooks Payments. My name is Michelle Long and I'm a CPA with an MBA in entrepreneurship and the owner of Long for Success, author of several different books. You can check those out and there is the link for our Facebook group. It's very active group, and we'd love to have you join us out there and continue the discussion.

Dan DeLong: 0:55

Dan, go ahead. Yeah, my name is Dan DeLong, owner at Dan Width. I worked at Intuit, uh, for nearly 18 years. So important, uh, important disclaimer. I am not Intuit anymore, right? So if you have any beef with QuickBooks Payments, I hear you. Right? Because, because I, I am on the, I'm on the other side of, uh, of, of the Intuit badge these days. Uh, but doing the co-hosting today, uh, as well as the co-hosting, uh, over at, uh, workshop Wednesdays at School of bookkeeping, uh, com, doing the tech editing for QBO for Dummies. And, uh, as a reminder, uh, we're, uh, well Pro-advisor, the, uh, top, the top 100 Pro-advisor, uh, voting is gonna be closing. Um, I think this Friday, uh, the 26th. I think that's, that's the last time. So, uh, it's the last, uh, if you haven't already put in your vote for Michelle, for, uh, for Provisor of the year. It's about time.

Michelle Long: 1:56

No, just vote for Dan and I please so we can get top free please.

Dan DeLong: 2:03

Yes, I'm sure there's cookies involved. You can vote

Michelle Long: 2:07

for three people and we would appreciate your vote please.

Dan DeLong: 2:12

A little bit of the details about the QB Power Hour. Uh, it's every other Tuesday, uh, not eligible for for c p credit, sadly. Uh, but, uh, we do appreciate you, uh, you, you tuning in and joining and, and, uh, maybe taking a break from your, from your client work or, or what have you. So we appreciate you, uh, uh, joining us here today. Um, we have, uh, PDFs of the slides, recordings, uh, the podcast, um, all at qb power hour.com/resources. I did post in the chat, uh, the link. I think it's a link. It doesn't look like it's a link, actually. Uh, Michelle, I don't know if you can, uh, see that and, and maybe repost it, but it, it didn't come in as a link, but the, uh, the slides for today, uh, are, are in there. Uh, speaking of which, if you do have specific questions about anything that we're talking about, uh, today on the, on the topic, uh, please put them in the q and a because that, that allows us to, uh, see them when they come in because sometimes when you, um, Go in the, the chat or, you know, have, uh, throw out a comment or, or what have you. Um, it scrolls by and we, and we might miss it. So, uh, we, we do our best to try to, you know, speak, you know, bring in the, the, the current, uh, questions that you might be having today. Uh, please put those in the q and a, um, regular off topic, um, you know, comments or, or whatnot. Um, you can put those in the chat, but you should be able to see the, the little QA button during it at the bottom, uh, especially if we have to follow up, uh, that, that gives us a great way to be able to do that. So our agenda today is, um, is all about QuickBooks Payments. I, I, I really like QuickBooks Payments. It's one of those services that that really benefits. I think, um, you know, everybody, right? Like, uh, your, your, um, Your, your, your clients get, uh, get, get potentially paid faster and, uh, because of the integrations, uh, you, you end up saving Samuel A. Little bit more time in theory. Right. But we wanna talk a little bit about those Yeah. But moments with, uh, with QuickBooks payments today. Uh, so we're gonna talk about, you know, the, the, some of the issues that, that might come up. Uh, you know, q new qbo o um, uh, new QBO accounts, uh, get new payments accounts. And maybe you didn't, you weren't aware of that. So we want to talk a little bit about what, what that, uh, how that happens and, um, you know, maybe have a, a conversation with your, with your clients. Uh, QuickBooks Checking is a, is a new-ish, uh, topic and we want to make sure that people are aware of that. You know, a lot of these things are, um, You know, if you, if if you aren't aware of them, um, typically your, your client will, will, will find them, and then they'll have, and then there'll be a discussion. So we wanna make sure that you're aware of those things. And then there's a lot of confusion about how to handle refunds, um, disputes. Um, there's a new service, um, and sometimes there is a, uh, a red alert right on your invoice tracker inside of QuickBooks that says, need the tension. And it, uh, there, there is a specific way that you can get that attention, uh, attended to. Um, so let's start off with our first poll, which is just what version of QuickBooks, uh, are you, uh, do you use today? Online, desktop, both something else.

Michelle Long: 5:34

And Dan, speaking of which version are you using, are you gonna specify throughout the session today, which, um, as you're talking about QuickBooks, if it's applying to desktop, online,

Dan DeLong: 5:43

or both? Most of the, most of the topics, we'll, we'll be talking about QuickBooks online payments and in the, the integration. But, um, desktop payment integration or desktop payments, you can do a lot of these same tasks. Um, but uh, you know, when we talk specifically about like QuickBooks checking, uh, that's not a desktop function or, you know, there, there are some things like that. So we'll, we'll point out where it's, uh, QBO only, uh, features or services here. Um,

Michelle Long: 6:14

great. And can we give a shout out? We got joining us today. Really good to see on here.

Dan DeLong: 6:24

Nice. Very nice. Thank you Mer, for joining us. All right. So let's, um, let's talk about why QuickBooks Payments first off. So, um, go. Share the results. Looks like most people are using both. Uh, but then, uh, the QuickBooks online is, is closely following with our, uh, desktop loyal, uh, also showing up here at that as well. Uh, so why QuickBooks Payments? So my, my favorite topic about, uh, you know, or benefit of, of QuickBooks Payments is the integration piece, right? Because especially with QuickBooks Online, um, once you send an invoice or collect a payment, you're pretty much done. You know, this is the theory, right? The theory is, is you're done entering the transaction because, uh, because it's an online service and you're using QuickBooks online and the cloud, uh, once that payment has been processed, the payment gets recorded automatically. Uh, once that payment has been deposited, the deposit gets made automatically and the fees are, are associated with the expense accounts that you set up in the, in the settings. Automatically, or as Brad Smith would say, automatically. Right. Um, so there is a lot less transactions to enter in when you're using QuickBooks Payments. Now, if you're using another payment provider like PayPal or, or, or Square, those things just don't automatically get entered into, into Quick Life. Yes, there are, you know, connections and integrations, um, but they're, they, they have their own set of, set of challenges, uh, built in with them. Right. So I like to call it, you know, it's you're billing and your bookkeeping at the same time. Right? You're, you're doing your, you, you've already created the invoice. So you're, you're, you're accounting for the, you know, the sales and the revenue and um, you know, terms and the, uh, sales tax and all that stuff is being done on the, on the invoice. Uh, but then you're receiving the payment and the billing. After that. Right. And with QuickBooks, uh, online advance, you can set up payment reminders when people, you know, uh, and workflows and those types of things so that you can, you don't necessarily have to follow up with all of those things when it, when it doesn't get billed, uh, properly. Um, it's a, it's a kind of a set it and forget it. Uh, Michelle, what do you, what do you think about the, the integration piece of the QuickBooks Paint?

Michelle Long: 8:44

You know, I, what I was gonna say, Dean, is that so many times that integration is what makes the difference, um, because of the time involved. If it's not integrated, if these companies, these small businesses, they'll go with a third party provider because it might be a percentage or two or a little bit cheaper on the fees or something like that. Well, then we have that problem where it's not fully integrated and we wind up spending a lot of times running it through some kind of clearing account and trying to get it posted into QuickBooks. Um, because of the, it, we lack that integration and we spend so much more time. Versus if you pay, maybe it's a smidgen higher on the fees, it's not that much more. But in the time and aggravation and getting it into QuickBooks, that integration is just huge. In my opinion. It is well worth it, even if it's a little bit higher on the percentage on that swipe rate. It's that integration is just huge in my opinion. Um, so I always think that it's, it's, that's to me a huge piece of it. And I always encourage the clients, if they are using something else, it's get rid of the aggravation and save the time. Um, just, just for that alone, let alone all these other things that you're gonna talk about here.

Dan DeLong: 9:56

Yeah. And it's, and it's not, um, You know, it's a, it's, it's not a fee if you don't use it, right? So it, it definitely is, you know, something that you can compare, right? If you are using Square, PayPal or some other method, you know, to collect payments, um, you know, compare it to, you know, to doing it inside of QuickBooks. There's a variety of ways to charge credit cards or bank and ach. Um, you know, e-invoicing is where you send out your invoice. It's, it's got a pay now link, um, or a button for them to pay on their end. Uh, there's mobile payments so you can, uh, process the credit cards in the app if you, even, if you have a, um, uh, there's a Bluetooth, um, card reader, right? So you can, uh, connect it to your mobile device or, you know, even inside of your QuickBooks online to be able to. Swipe the cards. If you're swiping in person, you get a little lower rate for, for those types of things. Payment links, um, those are, those are both in QuickBooks Online and desktop Now, um, where you can create a link to pay, so you can text, you know, text or email or, or however you want to, uh, send those, send those payment links. With QuickBooks online, you also be able to create like a, a static link, right? So, uh, it could be if, uh, you know, if you're taking, uh, like donations, uh, or, or things like that. One of the things that it doesn't do is integrate with your, you know, your, your shopping cart or your website, right? So, uh, you can utilize payment links and put a payment link on your website for, you know, Pay me, you know, uh, pay some fees, right? Like, whatever that might be. If it's a, a standard donation of$25 or something like that for a nonprofit, or if you have like a, a constant service that's always the same amount, you can use the payment links and, and be able to collect it that way. And it has some smart technology built into it so that it can kind of put those into a, um, a holding bin so that you can then apply those to, you know, your, your customer's payments, right? There's a pre-funding option where you can, uh, if you're using QuickBooks payments, uh, and, uh, and, and maybe doing like, uh, uh, get paid ahead of time, right? And then if they pay within, within a timely fashion, you know, some of the, the, the fees are waived, uh, by doing the, the, the pre-funding and the, the rates are relatively competitive, right? So when you compare those with, uh, with those square PayPal, you know, the more common, uh, online connection they are, they're relatively, um, Competitive. And then like, like you said, Michelle, those payments, uh, or those, those, uh, fees may make up, uh, even if it may be a little bit more, those fees may be compensated in time savings based on the, the, the integration, uh, I've created a, uh, a QuickBooks payments course on school bookkeeping.com. I have a link there, uh, to kind of go through, you know, a lot of, all of these extra things. Uh, you can, you can click on that if you want, and, uh, you can access it for free. There's no, uh, there's no charge for, for, for that particular, uh, payment course. Uh, so we wanna talk a little bit about, uh, one of the things that, um, that's new wish in, uh, in, in QuickBooks online, uh, uh, payments, right? Because there was a challenge when you have refunded more than you've collected, right? So like, uh, let's say you just have a, um, a refund, uh, one day and, um, you know, that's gonna be money coming out, right? So, um, it's leaving the bank account. So, um, what was having a, what what has a challenge sometimes, and you maybe get an alert, uh, in the past it would say, uh, we couldn't record a deposit, right? Because a, uh, a negative deposit is really a check, right, Michelle? That's a money leaving, uh, leaving the account. Um, so in a, in a, in the past you would, those, those funds would, uh, or that transaction, the automatic, uh, making of the, of the deposit, uh, was being held up because there was a challenge with that, and you would've to kind of work through, uh, the workaround. Uh, Michelle, what do you, uh, what do you wanna say about the, uh, about this, uh, negative deposit matching? Oh, you're muted. Sorry the

Michelle Long: 14:11

dog was barking. Yeah, it's just great that they finally have done that because we did have the good workaround, um, where we had come up with a way to record a negative deposit. And now it's nice that you can do that. So as you can see, um, in that second screenshot down there is coming through as money spent from the bank because like you said, it's money coming out of the bank and people are like, wait, you know, how does it work? But why would that happen? And like you said, in retail environment or e-commerce environment, maybe you just had a lot of sales, you know, you had a big Memorial Day sale or something like that and you had a lot of sales going on. Well then after the sale for some reason, you might have a lot of refunds and the refunds may exceed the daily sales. So you may actually have, actually have one day. Where you have negative sales for the day because you had refunds that exceeded the sales. So you have a negative daily deposit, and this is a situation where you have a negative amount that day where you actually had cash paid out. And so now QuickBooks has that ability to report it as money spent money coming out. Um, and so it, it alleviates that big workaround that we had. So I'm glad that Intuit listened to the feedback from people. So, you know, when we say, you know, hit the gear feedback, Intuit really does listen. And the more people that send that in there, you know, the more likely it, you know, rises up to the top where something gets done. So do send your feedback in. Um, and now we have that in there. So that was covered in the certification, the re-certification. So if y'all haven't done that yet, remember you do need to re-certify by June 30.

Dan DeLong: 15:46

Yes. And so there was a question in the, in the chat here. Uh, so how does this affect the sales receipt on the customer screen or payment of the invoice? Really, it's not, it, it doesn't have an effect of it, right? It's uh, uh, you know, as far as the customer is concerned, this is really just in a, in the instance of how do I record in the bank deposit reality, right?

Michelle Long: 16:08

Right. So in, in your point of sale system or whatever system they're using, you're gonna enter a refund to that customer. So, you know, however they're doing that, a credit memo. So it's going into the customer as a refund. And then it's coming as a negative, as all the, all the sales and refunds for the day. It's a negative deposit at the end of the day when those are all grouped. And that's where QuickBooks couldn't do that previously. It couldn't record a negative deposit. And now it can, and that deposit shows up instead of in the money received column, which are always, you know, deposits always showed up and money received. Now it's gonna show up in the money spent column because it's actually a draw on your checking account for the day. So it's just changing how it shows up. And it works now without us doing a workaround to

Dan DeLong: 16:55

make it work. Right. Let's work for, let's work for us to, to be, to be able to reconcile, uh, that money coming outta the account when that, when that has happened. Exactly. Ok. So there's. There, there's this QuickBooks checking account that, uh, we wanna kind of talk a little bit about. Originally it was called QuickBooks Cash, uh, because there was a cash flow hub, uh, or cash flow center, um, tied to it, uh, those types of things, but they rebranded or changed it to QuickBooks Checking, right? So when you sign up for a, uh, for a payments account, uh, the recommendation, uh, from Intuit is to use, uh, the QuickBooks checking as your default deposit account. Um, so it's an online business account. Um, and, and it, uh, They have this concept of, of envelopes. Uh, so if you subscribe to Dave Ramsey or you know, any other financial person where it says, you know, set money aside, uh, so that you don't be, so, you're not surprised with things like payroll, uh, and sales tax, uh, things that you're not necessarily supposed to be spending, uh, you can earmark those things and you can, um, you know, for, if you're saving for something, right? You can, you can set up a, an envelope and, and move money, uh, to it. But those, uh, envelopes money that's sitting in the envelopes is actually interest bearing. I think the interest is now, uh, 1.75%, which is, um, fairly competitive I think for, uh, for a, uh, you know, for a, for an interest bearing account. Um, you have, uh, instant access to deposits when you're using this as a, um, as a, uh, as as your default deposit account for, for QuickBooks payments and what, what is an instant access, right? So, um, When you, when you collect a payment, um, once that has kind of gone through the, you know, the, the, the authorization process, uh, you can, uh, you can get instantly, you know, you can, you can have that transferred, uh, instantly into the, into the bank account, usually about 30 minutes or so. And under normal circumstances, that, uh, instant access option is, uh, is a fee, right? Like if you have ever, uh, sent or received money, uh, through bill.com, they send, um, they send a, a, a myriad of, uh, of advertisements or notifications asking you if you want your money faster, and, uh, And, uh, they, they do that not out of the kindness of their hard, but because there's a, uh, 1% fee for that. Uh, so this is the same thing, uh, same concept, right? So you can get your money quicker. Uh, so if you have a cash flow, uh, cash flow issue and you need to have access to, to funds, you can get that, uh, within 30 minutes if you're using the QuickBooks payments, um, sorry, the, um, the QuickBooks checking with the quick tied with your, your QuickBooks payments, you can get your, your money instantly, um, and avoid the 1% fee. Now, this is not the 1% fee for, uh, ach. So all your transaction fees, uh, and those types of things, those are still gonna happen, right? So it doesn't matter if you have the QuickBooks checking or if you have it put into your, uh, bo, uh, bank account anyway. Uh, those things are gonna still happen, but this is just talking about the instant access, uh, piece of that. Uh, there is a debit card, uh, that you can, uh, have. I actually have one sitting in my wallet right here, um, greati, uh, nice and white. Uh, um, but you can use it for, um, you know, for, for auto payments. Uh, or just like, like any other, uh, uh, debit card. Uh, one of the complaints, I guess about the, the, the, the QuickBooks checking is that the accountant access has been, uh, has been very, has has limited, like, uh, originally, uh, when, when it first came out, uh, accountants couldn't even see it. Uh, which was, which was a challenge, especially because it's a bank account and, you know, you might wanna reconcile that every once in a while. Um, The, the, the nice, the nice part of course is that, you know, those, those transactions in theory should, uh, should all be entered automatically. But, um, you still wanna, you know, reconcile the account. Now the, now the account and access is, is such that, um, really if there's, if there's anything that has to do with real money movement, uh, you won't have access to that, but you should have access to, to pretty much everything else. You'll be able to see the, the transactions coming in. You'll be able to download the statements and, and actually perform a, a reconciliation, even if there, if it's the, uh, QuickBooks checking. But there are some things that only the account owner could do, which is pretty straightforward, you know, for a, uh, for a financial institution, uh, type of thing. And the transfers, they do take, uh, several days. So it's, it's not like a, you don't get instant access where you're, if, if you're putting money into the QuickBooks checking account or taking money out, uh, it does take a, take a couple days. And of course, when you're connecting, uh, your, your regular business checking account to you, to QuickBooks checking, there's that whole, you know, process of, uh, you know, confirming the account, you know, the test deposits and those types of things. So, uh, it's a, it's a good idea if, uh, if your client has, has set this up, uh, as the default account because of course, uh, Intuit, we'll, we'll strongly suggest that that's the, uh, that's the nicest way of putting it. And sometimes we may have done it. They may have done it without, Realizing, you know exactly what they, what they've done. There's, oh, I signed up for a, a bank account and I didn't even need one. Right? So, um, this is why we wanna talk about these things, you know, to let you know that there are, these things are there. Um, and it might be a conversation ultimately that you end up having with your, with your client about that. Um, speaking of account and access, right? So, uh, you know, when you're setting, when, when clients are setting up, uh, their payments accounts or if you're recommending that they set up a payments account, um, it is a financial institution, right? It's a, it's money movement. It's, uh, you know, if there's real money involved here with, with money going back and forth. Uh, so it is viewed by Intuit as a, as a banking financial, you know, they're, they're, they're obligated by all the banking rules, you know, the anti-money, money laundering laws and, and all of those things. So, um, there is a way that you can, um, be an authorized user, right? And, and you have to, um, You, you, you have to, uh, or they have to, sorry. It's a, your client actually needs to provide that to, um, to the payments, uh, team so that, uh, so that you are an authorized user. So if you ever have to, uh, contact into it about something about their, their payments or merchant account or, or deposits or whatnot, uh, they won't talk to you, uh, unless you're, you are an authorized user on the, uh, on the account. So, um, actually I'm gonna, that's gonna be my action item after the, is to put the process, uh, to, to be able to get the added as a, as an authorized user on, uh, on the merchant account because, uh, it, it, it gets, it's an obstacle, right? When, um, when you can't talk to, in, uh, to Intuit for, for something like that. I mean, I, I, I unfortunately had to have a, uh, a lot of those conversations, like, unfortunately, I can't, I can't divulge, right? Because it's, it's a, it's a financial institution thing, right? All right, so our, our next poll is not on my screen. Uh, there, it's okay. What is your preferred, uh, payment option? Squares a PayPal is a QuickBooks payment, something else, uh, or maybe you're agnostic to, uh, to payments, uh, and, and really don't, really don't care. Um, I do wanna, I saw a question here. Um, yeah, and it, it's a common question about the fees and, and we were just discussing it actually before we, before we went live, so we would wanna kind of talk this out. Um, so a lot of times, because there is a transaction fee, um, there is, there is this, um, mindset about, uh, you know, maybe transferring that, uh, to, to the client. Uh, so Michelle, you have a, you have a thought about that. So let's, uh, let's discuss that.

Michelle Long: 25:15

Oh, on the, the credit card fees and such, and whether you should pass them off to the client. Yeah, I don't li I don't like that. I mean, if, if I'm getting an invoice or a bill from somebody and they've got a 3% credit card fee on there or whatever, first of all, I'm gonna call'em up and ask them. Then I can pay it in cash or write'em a check to avoid the 3% fee. But I, I don't like the nickel and dime. I mean, it's just like, I don't like it. I would rather them increase their fees and if you're gonna charge me a hundred dollars and then charge me a 3% credit fee, credit card fee, or 4% or 5%, just charge me$105. Just, just bump up your fees to cover the cost. I don't wanna feel nickel and dimed, just bump up your fees to cover the cost of credit cards because everybody does that these days. So cover that to cover the cost. It's a cost of doing business. So just increase your fees and your prices to cover the cost of credit card charges? In my opinion. Yeah. I, I just don't like it because, and not only that, but you, you, you can't have it to where if I pay with a credit card, it automatically adjusts to include that amount. So it's almost kind of like an after the fact type of situation. So it doesn't work well anyway. So just increase your fees to cover the cost of that,

Dan DeLong: 26:33

in my opinion. Yeah. Yeah. I, as many of you know, I, uh, I live in an RV and we drive around the country a lot and. Uh, I can never tell what the price of fuel is, uh, because there's, there's this constant changing of the price at the gas station. Like, uh, if you're awards member, it's this price. If you're, uh, if, if you're paying cash, it's this price. If you're paying with credit card or a fuel card, I mean, there's like four different prices. Uh, so I'm like, I need fuel, right? Just whatever. It's, you know, and then, um, but it, but it is, uh, frustrating, right, to understand like, well, it's, if you pay with cash, it's this, if you pay with credit card, it's, it's, it's this. Um, right. But I agree, I I, I, I think you have a good, raise, a good point that, you know, really look at all of your, look at all of your fees or your expenses and make sure that you're making a profit, right? I mean, that's, that's kind of the goal of all this. And it, regardless of, of how they pay, I think, um, I'm trying to remember. There was a show, Washington, now of course. Uh, go ahead.

Michelle Long: 27:39

Well, so Bobby just posted in the chat here that they, they got a$6,000 fee, which is common. A lot of us have thousand dollars fees, and they said we don't want to have to eat the credit card fee on that. And I understand that. Okay, so are you willing if, if I owe$6,000, are you gonna give me a discount? If I'm gonna write you a check instead of paying with a credit card, are you gonna discount your$6,000 fees? In my opinion, no. You still want your$6,000 fees, right? You're not gonna discount that necessarily if they pay in cash. So you really should be bumping up your$6,000 fee to a 6,200 or whatever it comes out to be to cover the cost of the credit card fee, because you still want your 6,000 fee that you earned. You still want your six grand, you don't necessarily wanna discount that either if they're pay in cash, so, and somebody posted on the dentist in there. It's the same situation. If the, you know, the braces are gonna cost two, three,$4,000, you get a discount if you pay with a check or you pay in cash. And in my opinion, just bump it up to cover the credit card fees, unless you are gonna give people a discount if they pay cash. You know, in my opinion, credit card is just the way people do things now. So you increase your fees or to avoid the hassle of discounting then for, for cash or check.

Dan DeLong: 29:02

My, yeah. And then, uh, other people are, other people are, are, are putting out some, um, some other ideas of like, you know, if you really don't want, you know, certain fees to, um, to be part of your, uh, of, of your QuickBooks, you know, just turn off the pay, pay by credit card and, and only take ACH because that's 1% with a maximum of 10 bucks. Right. So, yeah. There's other challenges about ACH and we'll talk about those a little bit later, but, you know, if you're, if you were just talking about apples and apples with fees. Yes. The, the fees on ach, uh, transactions are significantly less, uh, then credit card fees. Um, and there's a reason for that. Um, yeah. But, um, uh, I remember it was, uh, the prophet was, uh, it was a show I was watching on and they were, he was going into, Yeah, he, he was going into a restaurant, it was a barbecue restaurant. They always had lines out the door, uh, and they didn't accept credit cards because of the fees. And he showed them on paper, it's like, here's how much business you're missing, uh, by not accepting fees. Um, that, that certainly makes, uh, or not accepting credit cards. Right. That certainly makes up the, the difference in the, the fees that you might have have to pay. So it, it is a, it is a different thing, right? There's a, there's a mindset thing about that. And, and I, I, it's clearly we struck a cord. Cause there's a lot, it's a lot of information in the chat about, uh, about that or not. Uh, oops. Yeah, I went, oh, there, it's okay. I wanna share, share the results. So it looks like, uh, QuickBooks Payments is, uh, is is the preferred payment option. Uh, so definitely is, uh, something, something pretty common. Uh, what were you gonna say, Michelle?

Michelle Long: 30:47

One, one more quick question for you. So somebody asked in the q and a about that QuickBooks checking if somebody set it up by accident, um, how do they get rid of it? And I know that we, the accountants can't close that account for them. Um, how do they close that account? Is it easy for them

Dan DeLong: 31:03

to do that? Yeah, um, I, I think it's really just a matter of not using it, but, uh, you will just wanna change your default, uh, payment, you know, deposit account, um, you know, by, by them contacting the, uh, the payments team to be able to do that. But again, it's gonna either need to be, you know, the, the account owner, um, you know, because when you're changing, you know, where funds are being deposited, uh, that is, uh, that, that's gonna be under a lot of scrutiny. Um, so either being a, uh, an authorized user, I mean, they may not even, you know, let you do it. Even if you're an authorized user. Uh, it may need to talk to the account ho owner in order to, uh, to do that. And by account owner, I'm talking about the merchant account. Owner, uh, the QuickBooks payments merchant account, not the, uh, not the, the bank owner of, of who ha who, where it's actually being deposited to. All right. So disputes, this is a touchy subject for me because I just got one. Uh, so, um, so it's a very topical, uh, I was catching up on some billing and, uh, and, and I charged my customer twice on the same day, uh, for, uh, for, for something. And his credit card company caught it, uh, and, and sent him in a message and said, Hey, it looks like you were charged twice, uh, by this guy. Uh, and of course he, he saw it as, uh, was like, well, I only normally pay him once a month. Um, not realizing that, that I was catching up on some, uh, some back billing. Uh, so he disputed it. He told, he told the, uh, told the credit card company. No, that wasn't me. Um, And, um, and, and, uh, you know, and then he sent me the email that he got from his, uh, his, his credit card company. And I told him what was happening. So there's a lesson in being, uh, uh, you know, talking to your customers before you charge them twice on the same day. Um, but yeah, now I'm going through the process of a dispute, right? So, um, now once a dispute happens, right? This is where the customer refuses payment through their financial institution. So this is a perfect example of, of what just happened. Um, you know, the financial institution reached out for a good reason, right? It looks like a double charge. Um, and, uh, under normal circumstances, he wouldn't be charged that, that, uh, on the same day. But now the burden of proof is on me, right? To, to now prove that this was, this was what happened. You know, uh, there is, uh, and of course this, this all starts a, a chargeback process. Now the money's being pulled out of my, uh, outta my account. Uh, so they, uh, there's gonna be an extra fee for that. And now we have this, uh, we have this awkward discussion with the, with the client, because now it's a potential ding on the merchant account, uh, and those types of things. So there is a, an article that I wanted to, that I wanted to link to about, um, you know, hand handling the, the, the chargebacks and those types of things, because now there's a reality of. Okay, my name is, my name's being pulled outta my account. There's a fee associated with that. Uh, am I gonna recoup that? Uh, I'm gonna charge the customer back the fee, uh, for that. Um, and now we have to have that discussion, uh, to handle in all that. So yeah, there, I, there's a screenshot of the alert that I got from the payments team. Like, uh, hey, this, uh, this guy, um, you know, one of your customers disputed a payment. Uh, so there is an alert right from the, um, you know, from the, from the, from the payments account, uh, to, to let me know that that is, um, something that I now need to address. Um, so, uh, it gives me links and, and, and methods of, of ways to do that and really just do that inside of your, your qbo, uh, to be able to do that. Um, but, you know, handling the dispute is, is, is a challenge because now you have the payments made, the deposits recorded potentially with others, and then the payment is removed and that. Chargeback fee, uh, is, is assessed. Uh, put it a lo uh, a note or a link, excuse me, a link in a note, a link to a blog article I did about the, uh, needs attention. Uh, and we'll talk a little bit more about that, uh, you know, specifically, uh, near the end of the, the webinar today. Uh, but then handling the disputes and actually how you, how you would handle that. So the payment is made, there's a payment, right? And the deposit is recorded and there's a deposit. So then the fees are removed and the chargeback is assessed. So there's gonna be a check. Uh, one of the ways to handle that is, is, uh, is entering in a check, uh, from the bank with the amount, plus the fee and the offset. Directly of the, you know, the balance back to the customer to just put it to ar, right? And then you put in a separate line item for the fees expense, right? So, uh, if it was, uh,$300 and the, the fee is$25, now the 3 25 is the check that's leaving, leaving the account, and the 300 goes back to the customer to, you know, give them a, a balance to pay again. Uh, and then the fees, uh, are associated with the, with the expense. And then easies thing to do is, is, is go into the, the, the original payment and then apply that to the check. Uh, that way those, those two, uh, the, the, the disputed payment and the, uh, and the check, they, they offset each other. And now you've got that invoice that you can now, uh, resend to the customer to, uh, to get another payment for. Or if you're gonna add the fee, uh, you can, you can put that on the, on the original invoice and, and send it off again. Right. So then there's this alert that shows up on your, on your, on your QuickBooks, this nasty red, red alert that annoys accountants and bookkeepers to no end, right? Because there's a on the invoice, uh, tracker, right? So when you go into a, a QuickBooks online, there's an invoice tracker. Um, when there is a dispute, the dispute is, is the end of the train, right? It's, it's the caboose of, of, uh, you know, the invoice and the payment, and then there's a dispute. Uh, this also could happen with, uh, with the non-sufficient funds, right? So, um, those two situations are gonna make this nasty needs attention on, on your, uh, on your invoice tracker, right? Because you, you can see here in the, the screenshot, it's got the, you, you can see the lifecycle of, of a payment, right? Sent, it was viewed, it was paid, deposited, and there's this nasty red. Deposit fail, right? And as long as that invoice is tied to that failed payment, that invoice tracker is gonna have that red, uh, needs attention, uh, alert there for all time, right? So the way that you get around that is either, uh, you know, first ar uh, first option of, uh, applying the, uh, the, the, the failed payment, uh, to, uh, to the check, you know, the money coming out. Um, you can, you can do that. Uh, and now that payment is not tied to an invoice. That's, that's the caveat here, is that the payment needs to be tied to the invoice, uh, directly. Um, so if you tie the, the invoice or the, um, the failed payment to the check, that's going to ar Now those two aren't connected. It's not an invoice to track, so you won't see that here on the, um, On the invoice tracker. Um, the other, uh, the other way to do that is with two journal entries, you have some kind of wash account, um, you know, for, you know, payment disputes or, or, uh, whatever it is that you wanna call it. It could be another income account or expense account. Uh, you, you then, uh, apply from, uh, accounts receivable to that, to that wash account, tie the invoice to that, and then reverse it same day as the payment. And then, um, tie the payment to, uh, to that, to that other invoice. So you have this, uh, two in, uh, two journal entry bridge between, uh, it's kind of like a, kinda like a mediator for an arguing couple, right? So they get between, uh, those two journal entries get between the invoice and the failed payment. And then therefore there is no, uh, there's no failed payment. And then that nasty, uh, needs attention, uh, will go away. Uh, there's an article about that. I've got a little video. Um, and, and, and to walk you through those, those two processes. Now, what if you don't wanna deal with the disputes, right? So, uh, QuickBooks Payments has, has offered a brand new service. Uh, of course this is not out of the kindness of their heart. Uh, there's an additional fee along that, but it might be worth it, right? So, uh, you can sign up for this service, uh, but what's gonna hit, here's what's gonna happen. Uh, you're gonna have an additional 0.99%. Why can't they do 1%? But that's 0.99%. The gas companies, um, Uh, 90, 99 0.99% fee on all transactions. So it's an additional fee for every transaction. Uh, but the benefit is you don't need to approve the dispute and call that, um, things that you need to do, um, to, to actually, uh, tell the, the, the payments processor, yes, this was a legitimate charge. Uh, here's, uh, here's all the, the information that I have, you know, uh, for, for that. Um, you don't need to prove anything. The, the, the payment protection proc, uh, the, the dispute, the, I can't say it, the payments dispute protection service just pays it, right? So, uh, this particular dispute, uh, would just refund the, the, you know, the charge back to the back to the customer. Um, And I don't need to prove anything, right? So there are limits, however, right? And, um, the limits are$25,000 per year, uh, and, uh, or, uh,$10,000 per transaction. So if you charge somebody$15,000 and they dispute it, the maximum they are gonna pay is, is 10,000 of that. You still would need to, you know, figure out the, uh, the other 5,000, you know, between the two. Um, and then of course it's, you know, 25,000 over the course of, of a year. So you have like this bank balance of, uh, or not, not a, I don't wanna say bank balance, but you have this balance of a maximum of$25,000 throughout the year. So kinda look at. You know, see, see if this is worth it. Right? Uh, um, look at your disputes that might have happened, you know, is your time and, and money worth, worth it? Not having to deal with, uh, with disputes at all. Uh, of course you would not have this needs attention, uh, shenanigans, right? Because it would just appear inside of QuickBooks, like the payment went through, right? Anything that happens after that, like, it's like a, you know, it's a settlement funding, uh, money, right? Um, so that's, uh, that's, that's one of the thing that's, that's a new thing there that you want you to know about. Uh, Michelle, you have a, a thought about that? Well,

Michelle Long: 42:16

no, Dan, I was gonna say it, it is a nice option and, and the one thing I did wanna point out is only on the debit and credit cards. It's only on the plastic. It's not on ACH or PayPal or Venmo or anything like that. Only debit and credit cards, not ACH payments. So that's something to keep in mind. Only debit and

Dan DeLong: 42:35

credit cards. I was looking at the, the article here, uh, as well, that the, um, you can turn it on and off, right? So, um, the, the challenge though is that if you turn it off, anything that was covered is no longer covered. Exactly. So once, yes, once, once you turn it off, um, you're, you're basically all, all everything's exposed, uh, potentially to, to a dispute. Uh, and then when you turn it back on, uh, it's only covered from that point on forward. It doesn't cover, like if you, you can't cherry pick, um, you know, where, you know time times that you might, uh, might have more disputes. Um, if you turn it off, you're, everything else is, is exposed to potentially a dispute and not covered, uh, by the dispute service. Yes. All right. So go ahead. Did you have something. No, no, no. Go ahead. Okay. Um, so handling a refund, um, I see this a lot and I've, I, I, I feel a lot of questions about actually refunding, um, especially when it has to do with a, a, a payment. Um, so pa main thing to, to realize is if it's before 3:00 PM and it might be 2:00 PM but specific time, uh, if you charge someone a, uh, a credit card payment, you're more than welcome to void it. Uh, as long as it's, as long as it hasn't settled, right? And, um, and that settlement is, is typically on the Pacific Pacific time. So you, east coasters, you get a lot more time throughout the day, uh, to potentially avoid, uh, avoid a transaction. Uh, but it will, you can just go in and, and void it. And it, it's as if it never happened, right? So, The challenge is, is that once that cutoff has happened and the funds of it starts, the funds of actually, you know, coming into your bank account and that customer needs, uh, you know, is either canceling or, uh, would like a refund, um, you would have to do a refund, right? So, uh, there's, there's a, there's, there's a school of thought about doing a credit memo. Um, but then, you know, the reality is, is when money comes out of the account, you need to, you need the account for that. So there's, there's a two step process when it becomes with a credit memo and, and a refund. So, QuickBooks, uh, online has this I option of a, a refund receipt, which is an equal and opposite, um, refund. Uh, or equal and opposite of a sales receipt, right? So the, that, that pulls the money from the, from the bank account and it reverses the, the revenue, uh, for that. So, I like to use a, you know, I would recommend using a, a, a refund receipt. Um, and you, you know, if, if you've used, uh, as soon as you choose the payment method, uh, for the customer, um, you'll be able to process the refund back on the card. Now, um, you have to use the same card. Um, you know, this is, again, one of those money, uh, money laundering things, um, that you can't put a refund on a different card, uh, than, than of which you, you processed it. So it has to have been processed. You know, the original charge has to be, has to have, how can you say it? The original charge has to have been processed through, uh, through QuickBooks, uh, through QuickBooks payment. So it has to be able to see that that charge went through on that card in order to refund or partially refund. Uh, back to, uh, back to that same car. Um, ACH is not refunded. Uh, so, um, because of the, the way money, money has moved, uh, that way needs to be initiated, uh, through another ACH H Pro push, you know, back to back to the customer's bank account. That can be done either through MEO or your bill pay service or whatever it is that you want, uh, even through your bank, uh, if, if you wanted to. And then you can also go under the merchant center, um, but only for, uh, the money movement, right? Like you can go into your merchant center, uh, and process refunds, uh, in, in, in, in that, in that regard, uh, to be able to do that. But just bear in mind that the refunds themselves are only gonna be the money movement piece of that. You still would need to account for that either through a refund receipt. Uh, or, um, or if you, you do wanna use a credit memo? No. Um, Michelle, you have any, uh, uh, thoughts about the credit memo, uh, process?

Michelle Long: 47:02

Um, no. Sorry, you caught me. Um, no. Credit memos are great. Make sure that you do, if there's taxable and non-taxable items on the invoice, make sure that you break those out. Um, so that on the credit memo that you have those separated out there. Um, so that you do make sure that you adjust the sales taxes as well. Um, if you aren't doing each item on there, make sure that you do at least

Dan DeLong: 47:29

do that. Definitely wanna, um, account for the account for the, uh, the, the items and the, and the, the, the sales tax. That's a good call out too. Yeah. All right. Still, um, I noticed this, uh, about six months ago or about maybe about a year ago, um, that, um, QuickBooks Payments and new QuickBooks online subscriptions are getting like a half of an account. It's, uh, it's, it's kind of a, it's, it's, it's, I, I think some people have some opinions about, about this. Um, but want to talk a little bit about, you know, the, the, the realities here. So all new direct build QBO o subscriptions are assigned a merchant account, right? So, um, when you sign up for, for, for a qb, a new QBO O subscription, uh, typically there is an opt-in, uh, for. Accepting credit cards, uh, through the, uh, the, the, the easy interview that, that you're presented, right? Looks like, who are you, you know, it'll ask you, you know, who are you, are you the owner? Are you the accountant? Are you the, are you someone else? And then it'll ask another question and, and it just seems like a, um, a simple startup question, right? Do you accept credit cards? Right? So when you say, yeah, I would like to accept credit cards, what happens is that invoices are gonna be payment enabled, right? I mean, by that means, uh, you know, when you look at a, when you look at an invoice, it'll be turned on, uh, for credit cards and bank transfers because you've answered those questions. You know? Um, presumably, you know, when you first open your QuickBook, the challenge is is that the, the account has not been fully set up yet, right? So, uh, we saw this on the, on the Facebook group, um, a couple weeks ago where, um, One of their clients had set up a new Qbl subscription and, um, someone had opted in. They don't know who or how, but somebody had, uh, answered those questions and they got an invoice and, uh, you know, the, the, the, the user was like, oh, well they accept credit card, so I'll, uh, I'll pay my rent. Right? Which was what they were, what they were getting invoice for. I'll pay my rent, uh, with, with a credit card. Then, um, what happens now is, um, is they pull the money right, you know, into it. Pull the money from their, from their account, uh, and then. They get a notice, uh, the, the customer gets a notice that, hey, you've got money. Would you like to finish your setup so that you can get it right? So now they're kind of the, the, their money's in limbo until they set it up. But the reality of the business practices is that they never wanted to accept credit cards. Uh, so they didn't because of, you know, presumably these fees and those types of things, they, you know, not really a great idea for, you know, somebody in their business to be able to, to be doing that. So now their money's kind of like locked up, uh, in this, uh, in this escrow account while they're, you know, the, the reality is, is that money has been pulled from, uh, from the, from the credit card, from the person that has been paying it. And, but it's not been completely set up yet. Um, So then they ultimately went through a dispute. So now there's, now there's that, that process on top of all of that, you know, to either get their money back. Uh, the simplest thing would've been to just finish, set up, let it get deposited, and then, you know, no longer use, you know, turn off, turn off in the preferences. Um, the, the other challenge of all of this is that because they're doing this inside of the QuickBooks product, there's a, there's a no ProAdvisor pricing. You know, it's, uh, many people may, may or may not know that when you are an accountant or a ProAdvisor and you refer people to QuickBooks Payments, you can actually get them a discount on their, on their fees. Uh, so by doing it this, this way, uh, it's direct builds fees. Uh, so there's, you know, there's no, there's no discount, uh, when it, when it comes to, to that, that process. I did put in a, a link there if you, if you don't. Wanna go through that whole process and you, you have a client that you wanna get'em, you know, the ProAdvisor discount, uh, for, for payments. Uh, you can, you can put in an application there, uh, and finish the process. And we can, our, our, our MPA lumps on the backend can connect it to the, to their, to their QuickBooks online account. Just needs to be within the first, uh, first 30 days. I have on the, uh, screen there last 30 days, but I guess within the last 30 days rather than, um, it's a new, it needs to be a new newish account. Right. Um, and then we have a, a link there for a video that we did to re reiterate what we, uh, what we're talking about here. Now, the, the, the caveated through, uh, Caleb Jenkins, uh, he actually brought to attention, he, he set up, uh, 10 new QBO accounts and, uh, this process didn't happen. Right. Didn't get that half. Um, half account set up, um, and we determined that it, uh, and it reached out to, to intuit. It's it's direct bill, meaning that, um, if you're creating the, uh, the, the QBO subscription and putting on your firm bill where you're paying for the, the, the subscription, that doesn't apply to this process. So, uh, if you're creating a, creating a, a, a QBO company and you're, you're having the billing being done by the, by the customer, that's when this potentially, uh, could happen. Just wanna make you aware. Um, and, uh, you know, I might maybe another one of those hornets nest that we're stepping on of like, how could they do this type of thing. I do understand that, you know, Because of the benefits of, of QuickBooks payments. It, they wanna make it easy for, for people to sign up, uh, uh, for the service and, and, and that sort of thing. But because we are dealing with actual money movement, um, there's, there's a, there's a flip side to that. Michelle, do you have a, an opinion, I know you wanna stay, uh, into a agnostic of all of these things, but what, what do you, what do you think about this scenario? Um,

Michelle Long: 53:52

no, I, I agree with what you said there, and I don't like it when clients set up their own QuickBooks to begin with. So I like it when we do that. Um, and I, I do like us trying to fix a form and all

Dan DeLong: 54:05

that. Sorry. That's okay. And, um, I agree. You know, if you, if you, and if you can save, if you can save them some money on the fees, why not? Right. So, exactly. That's another way we can add value for'em. Exactly. All right. So, um, another one we wanna talk about is the initial funding delay. Um, so when you, uh, in, in, in, in the past, right there, there used to be, uh, charge limits, um, when it, when it came to, uh, how much you could charge monthly. Uh, because again, we are dealing with actual physical money movement, well, not physical, it's digital money movement. But because you're moving funds from one bank account to another, um, there's a risk, right? There's a risk of these disputes. There's a risk of, um, you know, fraud and those types of things. So, um, so the payment accounts had a, I think it was$10,000 monthly limit, uh, initially, right? And then if you had a business that would potentially charge more than that, then you had to go through this, uh, process that you were a good for it, right? Because it's, um, You would've to, you know, send a bank statement in six months and, you know, if all, all, if you just wanted to have a slight increase or, or a significant increase, uh, either one, uh, over that, you know,$10,000 monthly, monthly charging, uh, limit. Uh, so to combat that and make it again, to kind of make it easy to, to do these things, um, they eliminated the, uh, monthly limits, uh, however, to, uh, to, to, to go through that process. They, they, you know, they, you don't have to do all that, uh, that stuff to prove that you're good for the, the funds. Um, but the first payments are going to be monitored, right? So they actually, somebody's gotta actually watch the funds go through and, you know, they're, they're, they're monitored. I don't think that there's anybody actually like looking at the funds going, going through the process cause they can't be too exciting. But, The first payments are actually monitored, uh, through that process, and that could take up to five to seven business days. Uh, so it's just something to be aware of that, uh, those, those initial deposits are gonna be delayed because they're actually being monitored, making sure there's no abnormalities with the, with, with the, and the, and the one I establish a history of, of transactions through that. So, um, I, I had, uh, recommended QuickBooks payments to a company. They switched. Right. So, um, that five to seven days was a pretty big hit on their cash flow when they were accepting credit cards, you know, somewhere else. So there was a, a week basically of those funds not coming through. And then once it was, once they were all monitored, whoosh, all of them came into the bank account on one day, uh, and everything was, was fine. But having that conversation upfront to let them know that, hey, these transactions are, are gonna take a little bit of time before they get there. Um, once they are, you know, past the monitoring credit cards are gonna be, should be turned onto next day. ACH is gonna linger around five days, uh, from time, from deposit or from time from collection to the time it's actually deposited. But ultimately, we'll turn into next day. But that could take up to four weeks of monitoring again, because it's a different type of, uh, funding. Woo. Okay. We, we coming in for a landing here, so we'll throw out the, uh, the last, uh, Whole question here. Did you learn something today? Because that's, uh, that is certainly our goal, uh, when it comes to the Cubi Power Hour. Did you, did you learn something new? Um, okay, Michelle and

Michelle Long: 57:43

I, I did have a couple announcements. So I put in the, um, chat room, I did put the link and we would please appreciate your vote for Dan and I for top 100. So I did put the link in the chat and so you don't forget, just go ahead and vote today and we would love to have you all start applying for top 100 next year. And so, as Merf mentioned in the chat, go ahead and track whenever you join us for these, um, QB Power Hour webinars. Keep track of when you're attending that. So just start a little note or a notepad or word or an Excel file or Google whatever. Keep track of when you're attending these. And then next year when you're applying for top 100, you can report your attendance and that will be asked and you can record that and that'll be. Part of the top 100 for next year. Um, and those of you that are going scaling new heights next month, um, I hope you'll say hi to me. I will be in a boot or most likely on my scooter running around. You'll see me somewhere there. Um, Dan, do you wanna tell us what you'll be doing next month?

Dan DeLong: 58:43

Yeah, so I, I unfortunately have to decline coming to scaling new heights this year because my son is in the Navy and they earned, uh, what's called a Tiger cruise, uh, which allows them to invite a family member, uh, to join them on their last leg as they come back to the states. So, uh, super excited, uh, for this opportunity. I have to go to Hawaii to meet him. I mean, that's just, I don't know if I can, uh, you know, stomach that, uh, in June. Yeah. Uh, but, but that's, that's where they're, uh, offloading the, the, the airmen. He's on an aircraft carrier. Uh, so that leaves room for, uh, for people to, to join. So it's kind of like take your dad to workday, uh, for, for, uh, uh, you know, for several days on an aircraft carrier. So it's a really exciting experience, unfortunately. It's right over scaling new heights. So, uh, I had to decline, uh, um, I was scheduled to teach and, and I, I had to, had to decline that as well. But this is a pretty, um, pretty amazing experience. I really can't pass it up. And, um, really, really cool to see, you know, what he's been up to. Um, and spend some, some, hopefully some quality time with, uh, with my son as he, as he comes back to the, his first from his first, uh, overseas deployment. Oh, that's

Michelle Long: 59:59

gonna be an amazing experience. I think that's a really good reason. I mean, that's gonna be incredible. I, I can't wait to hear all about it. So I hope you enjoy that, Dan. So thank you for Dan. Your expertise today on QuickBooks Payments. You are the guru in this area, that's for sure. And we also wanna thank Mer for all the hard work he does on the top 100 cause he's the guru behind the scenes on top 100. So thank you Mer, for doing all that. Thank you guys for attending. Um, and thank you hopefully for your votes as Dan and I cross our fingers cause it's hard to get to that, um, and, and do that. So we do appreciate all that. But thank you all for attending. Um, and thanks for all your work doing all this Dan. And uh, hopefully we'll see

Dan DeLong: 1:00:44

you, see you all next. Yeah, we'll see you next time on the on the QB power hour. Uh, actually next time we're gonna be having file come on to talk about, uh, their expense management. So we talked about money coming in today. We'll talk about money going out, uh, next time on the on the QB Power Hour. Hope we all have a great day and we'll see you next time.

Michelle Long: 1:01:01

Thanks everybody.