Your customer moved its payables to AvidXchange, BILL, Ramp or Paymode, and now its payments stop looking like its payments. The ACH shows up under the network's name, the remittance arrives in an email from an address you've never seen, and some months it isn't an ACH at all but a virtual card number you have to run yourself. In QuickBooks Online the invoices stay open until someone works out which customer each deposit belongs to and which invoices it pays. Record each one as a payment from your customer, not the network, against the invoices its remittance lists.
What changes when a customer pays through a network
AP automation platforms pay suppliers on their customer's behalf. Your customer approves the bills in the platform, and the platform sends the money and the remittance to you. Three things usually change on your side.
- The bank line names the network. The deposit description often shows the platform rather than your customer, so a bank feed rule keyed on the customer's name stops working.
- The remittance comes from the network. It arrives as an email notice, a portal page or a downloadable file, listing the invoice numbers your customer entered when it set up the bills.
- The payment method can change. Depending on the platform and what you've enrolled in, you may get a standard ACH, a faster ACH that carries a fee, a printed check from the network, or a single-use virtual card.
None of that changes who owes you. The payment still belongs to your customer, against your invoices, and it's recorded that way in QuickBooks whatever name is on the bank line.
What each network sends you
The details vary by platform and change over time, so treat this as a guide to what to look for rather than a description of anyone's current terms.
- AvidXchange. Suppliers can be paid by virtual card, by an enhanced direct deposit option, or by mailed check. Remittance detail comes by email or through its supplier portal. The enhanced direct deposit option has carried a fee to the supplier, so read the enrollment terms before you accept it.
- BILL (formerly Bill.com). An ePayment arrives by ACH with an email notice carrying the remittance, including the invoice numbers your customer entered. A check sent through BILL carries the same detail on its stub.
- Ramp. Bills paid through Ramp Bill Pay usually reach you by ACH or check, with an email from Ramp about the payment. Ramp also has a vendor portal where you can manage your payment details.
- Paymode. Basic ACH receipt is free to suppliers. A premium tier adds detailed remittance files in formats such as CSV or Excel, for a per-payment fee to the supplier.
Whichever it is, set the network's notices to go to your AR mailbox rather than whoever filled in the enrollment form. Most networks let you change the remittance email address in your supplier profile. Keep a short list of which customers pay through which network, with the portal login for each, so a missing remittance can be downloaded in a minute instead of chased by email with your customer's AP team.
Applying an ACH or check from a network
Record the payment exactly as if your customer had sent it directly. In Receive Payment, choose your customer, not the network, tick the invoices the remittance names, and enter the amount paid on each. Put the network's payment or trace number in Reference no., and attach the remittance email or file to the payment so it's there when the customer queries a line. Our guide to applying a customer payment to multiple invoices in QuickBooks Online has the screen-by-screen steps.
One network deposit can cover more than one of your customers when several of them use the same platform and pay on the same day. Record a separate payment for each customer, into Undeposited Funds, which newer screens call Payments to deposit, then group them on one bank deposit so it matches the bank line. Our guide to one payment across several customer accounts covers that case.
If you've enrolled in a paid option and the network takes its fee from each payment, the deposit is short by that fee. Treat it the same way as a card fee, below, and code it to its own expense account, for example Network fees.
Virtual card payments and the card fee
A virtual card is a single-use card number, sent by email or available in the network's portal, for the exact amount of the payment. You run it through your own card processor like any other card, which means your processor charges its usual fee, and the deposit is usually the payment less that fee.
Record the payment for the full amount, so the invoices close, into Undeposited Funds. When the processor's deposit lands, create a bank deposit that selects the payment and add a negative line for the processing fee, coded to merchant fees. The deposit then matches the bank line, and the invoices show as paid in full.
Card fees on large invoices add up quickly, so decide whether you accept virtual cards from every customer. Many suppliers accept them for small balances and ask customers to switch larger ones to ACH. A network will usually let you change your preferred payment method in your supplier profile.
Matching the deposit in the bank feed
Once the payment or deposit is recorded, the network's line in the Banking feed should show a match to it. Accept the match rather than adding the line as a new transaction. Adding it with a category such as Sales records the income a second time and leaves the invoices open, so the customer looks overdue while your income is overstated. It's the most common way network payments go wrong in QuickBooks, because the unfamiliar name on the bank line looks like something new.
The same applies to bank rules. A rule that categorizes everything from a network's name as income will do it to every payment, from every customer who pays that way. If you use rules for network deposits at all, turn off automatic confirmation so each one waits for you, and match it to the payment you recorded instead of accepting the rule's category. When a deposit arrives with no remittance yet, leave it in the feed until the email turns up, or record it against the customer without invoices as an unapplied payment and apply it when the detail arrives.
When the remittance and the payment don't agree
A network pays what your customer approved, and that isn't always what you invoiced. The usual reasons are a bill your customer entered with a different amount, an invoice it hasn't approved yet, or a credit it applied on its side. Apply what was paid, leave the rest of the invoice open, and ask your customer's AP team, not the network, because the network only moves the money.
Watch for invoice numbers your customer re-keyed. A remittance listing an invoice number with a typo, an added prefix or missing leading zeros is common when bills are entered by hand on the payer's side. Our guides to short-paid invoices in QuickBooks Online and unapplied payments cover what to do with the difference.
Where RemitClear fits
Forward the network's notices to RemitClear and it reads the remittance, whether it's in the email body, a PDF or a CSV or Excel file, and matches each line against your open QuickBooks invoices. Matching handles exact, partial, and prefix-based invoice numbers. It records the payment against your customer, not the network, one payment per customer, with the remittance attached, into Undeposited Funds or the bank account you choose. Choose Undeposited Funds when you want to take the card or network fee off on the deposit.
Once you switch automatic posting on, a payment posts by itself only when every line matches its own invoice number, the total agrees to the cent and every invoice settles exactly. A short payment, a line that doesn't match or a possible duplicate waits in a review queue with the original remittance beside the match. See how it works on QuickBooks Online.
