How to Cancel a Direct Deposit in QuickBooks Desktop

Direct deposit in QuickBooks Desktop is a convenient payroll feature that enables businesses to electronically transfer employee Paychecks directly into their bank accounts. It eliminates the need for paper checks and simplifies the payroll process, saving time and reducing administrative burden. With QuickBooks Desktop’s direct deposit functionality, businesses can securely and efficiently pay their employees on time, while also ensuring accuracy and compliance with payroll regulations.

Several users of Intuit Payroll are unaware of how to cancel or void a direct deposit in QuickBooks Payroll. Direct deposit in QuickBooks saves time and works for both vendors and employees. However, the majority of the users do not know the steps to cancel direct deposit paychecks. This guide explains the steps and requirements for canceling a direct deposit in QuickBooks Payroll. Follow the steps stated in this guide to cancel a direct deposit successfully. The cancellation process is simple and easy to implement.

Importance of Cancelling Direct Deposits Accurately in QuickBooks Desktop

Canceling direct deposits accurately in QuickBooks Desktop is crucial for ensuring the smooth and error-free management of employee payroll. A precise cancellation process prevents unnecessary financial complications, ensures employee satisfaction, and maintains legal compliance. This article highlights the significance of accurate direct deposit cancellation.

Avoid Overpayment and Financial Errors

Accurate direct deposit cancellation prevents the risk of overpayment to employees. Timely cancellation ensures that the funds are not transferred to the wrong accounts, saving the business from potential financial losses and complications.

Employee Satisfaction and Trust

By promptly canceling direct deposits, employees receive accurate compensation and avoid delayed or missed payments. This fosters trust and satisfaction among employees, boosting morale and productivity within the organization.

Legal Compliance and Audit Trail

Maintaining accurate payroll records is essential for legal compliance. By following the correct process to cancel direct deposits, businesses can provide an accurate audit trail, demonstrating their adherence to payroll regulations and labor laws.

Avoiding Reconciliation Issues

Accurate direct deposit cancellation minimizes the chances of reconciliation problems in the future. With precise records, businesses can easily reconcile their payroll accounts and maintain accurate financial reports.

Efficient Payroll Management

An accurate cancellation process streamlines payroll management, saving time and effort for HR and accounting personnel. This ensures that the payroll process remains efficient and error-free.

Related Post: How to Set up Direct Deposit in QuickBooks

Steps to Cancelling Direct Deposit in QuickBooks Desktop

Step 1: Accessing the Payroll Centre

To initiate the direct deposit cancellation process in QuickBooks Desktop, open the software and navigate to the “Employees” menu located on the top toolbar. From the drop-down menu, select “Payroll Centre.” This action will take you to the Payroll Centre, where various payroll tasks can be managed, including direct deposit cancellation.

Step 2: Navigating to the Direct Deposit Window

Within the Payroll Centre, find and click on the “Pay Employees” tab present on the left sidebar. Then, look for the “Cancel” button positioned at the top of the window. Clicking on this button will open the “Cancel Pay Checks” window, which will allow you to proceed with the direct deposit cancellation process.

Step 3: Viewing the Employee List with Direct Deposit

Upon accessing the “Cancel Pay Checks” window, you will be presented with a list of employees who currently have active direct deposits. Thoroughly review this list to ensure that you are selecting the correct employees for cancellation. Verify essential details, such as employee names and payment amounts, before proceeding.

Step 4: Selecting the Employee for Cancellation

From the list of employees with active direct deposits, identify and select the specific employee(s) for whom you wish to cancel the direct deposit. To accomplish this, simply click on the checkbox next to the employee’s name. In cases where multiple employees require cancellation, you can select them simultaneously.

Step 5: Cancelling the Direct Deposit for an Employee

Once the employee(s) is selected, proceed to click on the “Cancel Direct Deposit” button situated at the bottom of the “Cancel Pay Checks” window. A confirmation prompt will appear, requesting your approval for the cancellation. To finalize the cancellation, click “Yes.”

Related Post: Fix QuickBooks Direct Deposit Not Working Issue

How to Turn Off Direct Deposit for an Employee in QuickBooks Online Payroll?

Temporarily disable direct deposit while issuing a paper check for payroll, bonuses, or commissions. Here are the steps to turn off direct deposit in QuickBooks Online Payroll:

• Choose the “Payroll” option and then choose the option “Employees”.
• Choose the “Run Payroll” option.
• Click the “Direct Deposit” icon beside the employee’s name.
• Choose the “Paper Check” option.
• Check and submit the payroll as usual.

How to Reverse a Direct Deposit in QuickBooks Payroll?

Duplicate or wrong payments need a direct deposit reversal. QuickBooks provides reversal requests within five business days from the paycheck date. However, this process does not assure fund recovery.

Here are the steps to reverse a Direct Deposit in QuickBooks Payroll:

Step 1: Review Reversal Eligibility

A direct deposit reversal is relevant when:

• The reason is ACH or EFT laws, like duplicate or unintended payments.
• The paycheck was not overruled.
• The request is within five banking days (before 12:00 PM PT).
• The employee’s bank account stays in their profile.
• The amount is above USD 50 in QuickBooks Desktop Payroll and QuickBooks Contractor Payments (because of a USD75 reversal fee).
• The amount is above USD50 in QuickBooks Online Payroll when using the reversal form (USD 75 fee applies).

Users who fail to meet these criteria or do not wish to pay the sum of USD75 must recover funds directly from the employee or contractor.

Step 2: Submit a Reversal Request

Here are the steps to submit a Reversal Request in QuickBooks Online Payroll, QuickBooks Desktop Payroll, and QuickBooks Contractor Payments.

For QuickBooks Online Payroll

• Choose the “Payroll” option, then click the “Employees” option.
• Choose the option “Paycheck List”.
• Select the paycheck(s) to reverse.
• Open the Actions dropdown and choose the “Reverse” option.
• Select a “Reversal Reason” from the dropdown menu.

Alternative Method Using the Reversal Form

• Open the Direct Deposit Reversal Form.
• Click the option “Add Request”.
• Enter the required details.
• Choose the “Save” option.
• After approval, void the paycheck in payroll records.

For QuickBooks Desktop Payroll & QuickBooks Contractor Payments

• Open the Direct Deposit Reversal Form.
• Click the option “Add Request”.
• Enter the required details.
• Choose the “Save” option.
• After approval, void the paycheck in payroll records.

Step 3: Review the Reversal Request Result

Here are the steps to review the reversal result and cancel Direct Request in QuickBooks Online Payroll, QuickBooks Desktop Payroll, and QuickBooks Contractor Payments:

For QuickBooks Online Payroll

Successful Reversal

• A deposit will be displayed in the bank account within 7-10 business days.
• After getting the funds, void the paycheck in QuickBooks Online.
• Employees or contractors can dispute the reversal for up to 60 days.
• Intuit will debit the company bank account if a dispute arises and funds are reimbursed.

Unsuccessful Reversal

• The reversal is considered failed if funds do not appear after 10 days.
• Do not void the paycheck. The employee or contractor already acquired the net pay, making gross wages valid.
• Recover funds from the employee or contractor directly. Void the paycheck only after getting the money.

For QuickBooks Desktop Payroll

Reversal Request via Direct Deposit Reversal Form

• A request review takes up to 9 banking days.
• An email will list the required corrections if certain information is missing. After saving changes, the review will continue.
• In case any agent requires additional details, they will contact you.
• The reversal will not be processed when the employee’s or contractor’s bank account has inadequate funds.

Successful Reversal

• An email is sent when the request is accepted.
• Funds will be taken from the employee’s account and credited back within 14 banking days.
• After getting the funds, void the paycheck in payroll records.
• Employees or contractors can dispute the reversal for up to 60 days.
• Intuit will debit the company bank account if a dispute arises and funds are reimbursed.

Unsuccessful Reversal

• Do not void the paycheck if the request fails.
• Since the employee or contractor received the net pay, gross wages remain effective.
• Recover funds directly from the employee or contractor. Void the paycheck only after getting the money.

For QuickBooks Contractor Payments

Review and Result of Direct Deposit Reversal Request

• The request review takes up to 9 banking days.
• An email will list the required corrections if certain information is missing. After saving changes, the review will continue.
• An agent contacts you for further assistance.
• The reversal is rejected if the employee’s or contractor’s bank account has inadequate funds.

Successful Reversal

• An email confirmation will be sent after the request is accepted.
• Funds will be taken from the employee’s account and credited back within 14 banking days.
• After getting the funds, void the check.
• Employees or contractors can dispute the reversal for up to 60 days.
• Intuit will debit the company bank account if a dispute arises and funds are reimbursed.

Unsuccessful Reversal

• Do not void the paycheck if the request fails.
• Since the employee or contractor acquired the net pay, gross wages remain valid.
• Recover funds directly from the employee or contractor. Void the check only after getting the money.

Conclusion

In this guide, complete information about how to cancel direct deposit in QuickBooks Online and QuickBooks Desktop is mentioned. This information helps you cancel a direct deposit in QuickBooks Payroll with ease.

Still, if there are any additional queries or for any technical confusion, feel free to reach out to our team of skilled QuickBooks experts. For further assistance, contact our certified QuickBooks advisors at 1800-892-1352 to resolve your queries.

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