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Accounting | How To

How To Process Credit Card Payments in QuickBooks Online

Updated October 20, 2022

Tim Yoder, Ph.D., CPA

REVIEWED BY: Tim Yoder, Ph.D., CPA

Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.

 

WRITTEN BY: Mark Calatrava

Published July 20, 2022

Mark has researched and reviewed accounting software at Fit Small Business since 2019 and has developed an extensive knowledge of accounting software features and how unique business needs determine the best accounting software.

Published July 20, 2022

This article is part of a larger series on Accounting Software.

Learn More With Our QuickBooks Online Course
Explore the chapters in the guide.
  1. How to Set Up QuickBooks Online
  2. Part 1: Setting Up QuickBooks
    1. How to Set Up Company Information
    2. How to Customize Invoices, Sales Receipts & Estimates
    3. How to Set Up Invoices, Sales Receipts & Estimates
    4. How to Set Up Products and Services
    5. How to Set Up Messages
    6. How to Set Up Statements
    7. How to Set Up Expenses
    8. How to Set Up Advanced Settings
  3. Part 1: Setting Up QuickBooks (Cont.)
    1. How to Import Bank Transactions
    2. How to Import Credit Card Transactions
    3. How to Set Up Multiple Users
    4. How to Set Up the Chart of Accounts
    5. How to Set Up the Products and Services List
    6. How to Set Up Customers
    7. How to Set Up Vendors
  4. Part 2: Managing Sales and Income
    1. How to Create Estimates (Quotes or Bids)
    2. How to Create and Send Invoices
    3. How to Receive Payments
    4. How to Create & Send Sales Receipts
  5. Part 3: Managing Bills and Expenses
    1. How to Write & Print Checks
    2. How to Enter Bills
    3. How to Pay Bills
  6. Part 4: Managing Banking Transactions
    1. How to Enter Banking Transactions Manually
    2. How to Manage Downloaded Banking Transactions
    3. How to Record Bank Deposits
    4. How to Transfer Funds Between Bank Accounts
    5. How to Handle Bounced Checks From Customers
    6. How to Process Bank Reconciliation
  7. Part 5: Managing Business Credit Card Transactions
    1. How to Enter Business Credit Card Transactions Manually
    2. How to Manage Downloaded Business Credit Card Transactions
    3. How to Enter a Credit Card Refund
    4. How to Reconcile Business Credit Card Accounts
  8. Part 6: Managing Credit Card Sales
    1. How to Manage Credit Card Sales With QuickBooks Payments
    2. How to Manage Credit Card Sales With a Third-party Credit Card Processor
  9. Part 7: Set Up and Manage Payroll
    1. How Set Up and Run Payroll
    2. How to Manage Payroll Tax
    3. How to Add Historical Payroll Data
    4. How to Set Up Automatic Deposits
    5. How to Print Payroll Checks
    6. How to Run Payroll Reports
    7. How to Reconcile Payroll Liabilities
  10. Part 8: Reporting in QuickBooks Online
    1. How to Run a Profit and Loss Statement
    2. How to Run a Balance Sheet Report
    3. How to Run a Statement of Cash Flows
    4. How to Run an A/R Aging Report
    5. How to Run an A/P Aging Report

Quickbooks Online
This tutorial will show you how to process credit card payments in QuickBooks Online using QuickBooks Payments. First, we’ll go over how to set up QuickBooks Payments as you’ll need an account to process payments, then we’ll look at how to record credit card payments using a sales receipt and a customer invoice.

This guide is one of our many free QuickBooks Online tutorials and is designed to help you use QuickBooks Online effectively, our top-recommended small business accounting software. To get the most from this, follow along in your account. If you don’t have a subscription, you have two options: a 30-day free trial or 50% off for three months.

Visit QuickBooks Online

How To Set Up QuickBooks Payments in QuickBooks Online

Heads up!

If you already have a QuickBooks Payments account, you can skip this part and jump to how to record a credit card payment using a sales receipt.

Step 1: Navigate To Payment Settings

Click on the gear icon in the upper right corner of your QuickBooks Online screen, then select Account and settings under Your Company, the first column, as shown below.

Navigating to Account and settings in QuickBooks Online.

Navigate to Account and settings in QuickBooks Online

From the Account and Settings screen, click on Payments in the left menu bar.

Navigating to Payments settings in QuickBooks Online.

Navigate to Payments settings in QuickBooks Online


Step 2: Apply for a QuickBooks Payments Account

If you already have a QuickBooks Payments account, you should proceed to step 3. If you don’t have one, you need to apply for an account by clicking on the green Learn more button in the Payments settings window.

Starting a QuickBooks Payments application in QuickBooks Online.

Start a QuickBooks Payments application in QuickBooks Online

After hitting Learn more, you’ll be taken to the QuickBooks Payments account application window consisting of three sections, as shown below.

Payments account application in QuickBooks.

QuickBooks Payments account application

  1. Payment deposit info: QuickBooks will ask which of your bank accounts should receive your credit card deposits and be charged credit card fees. If you haven’t already added a bank account to your chart of accounts, select a different bank account and hit the Add button. When you have selected the account, click the green Save button.
  2. Business info: You’ll be asked to provide business information, such as company name, business type, and business address.
  3. Personal info: QuickBooks will prompt you to provide personal information, including your full name, address, and phone number.

If it is your first time setting up QuickBooks Payments, then you should see a start button next to each section. Otherwise, you should see a View button, just like in the screenshot above (items B and C).

When all three sections are complete, click the green Get set up button at the bottom of the screen (not shown in our image).


Step 3: Review Payment Settings

Navigate to the payment settings screen as you did in Step 1. Now that you’ve signed up for QuickBooks Payments, your Payment settings screen should look like this:

Reviewing payment settings in QuickBooks Online.

Review payment settings in QuickBooks Online

  1. Merchant details: Click the green Manage account button to go to your QuickBooks Payments account.
  2. Deposit accounts: The bank account listed in this section will be used to deposit your credit card proceeds and withdraw processing fees. Changing the bank account here will not affect the QuickBooks account wherein the transactions are recorded.
  3. Chart of Accounts: This field identifies
    1. the QuickBooks bank account to record deposits; and
    2. the QuickBooks expense account to categorize the processing fees.

To designate an account to record processing fees, click anywhere in the Chart of Accounts section.

Next, click on the drop-down menu next to Processing fees (under Charts of Accounts) and choose an expense account to charge your credit card processing fees. If the account is not yet in QuickBooks, you can create a new account by clicking on + Add New from the drop-down list that shows up when selecting an account. After selecting an expense account, click the green Save button.

Selecting an account to record credit card processing fees.

Select an account to record credit card processing fees


How To Record a Credit Card Payment Using a Sales Receipt

You learned how to create and send sales receipts in an earlier tutorial. Now that you have a QuickBooks Payments account, you can issue sales receipts to record customer payments via credit cards, debit cards, and bank transfers.

Step 1: Create a Sales Receipt

Click + New at the top of the left menu bar and then select Sales receipt under Customers, the first column.

Creating a new sales receipt in QuickBooks Online.

Create a new sales receipt in QuickBooks Online


Step 2: Enter Credit Card Information

To accept payment via a credit card, debit card, or bank transfer, click the drop-down box under Payment method and choose the form of payment.

Processing credit card payments with sales receipts.

Process credit card payments with sales receipts

After selecting the payment method, click on Enter credit card details to input the customer’s credit card account information.

Entering customer credit card information.

Enter customer credit card information

After inputting all the credit card information, hit the green Use this info button. The credit card transaction hasn’t yet been processed, and you’ll receive a message that you have 10 minutes to process the transaction before the credit card information is removed from the sales receipt. After acknowledging you have 10 minutes, you’ll be redirected to the sales receipt screen.


Step 3: Save Sales Receipt & Process Credit Card Payment

Sales receipt with credit card information.

Sales receipt with credit card information

The Sales Receipt screen now shows the last four digits of the credit card number that will be charged. To process the transaction, click the green Save and send button.


Step 4 (Optional): Verify the Credit Card Transaction Processed

Reopen the sales receipt by hovering over Sales in the left menu bar, clicking on All Sales, and then finding the sales receipt transaction you just created. After opening the sales receipt, verify that it reads “Transaction processed” under the Payment method.

Verifying the credit card payment processed on a sales receipt.

Verify the credit card payment processed on a sales receipt

Click on Transaction processed to view the details of the transaction.

Viewing the credit card transaction receipt.

View the credit card transaction receipt

You can either print the transaction details by clicking the Print button or issue a refund to the customer by hitting the Refund button.


How To Record a Credit Card Payment on an Invoice

This process is unnecessary if your customer pays an invoice online by clicking Pay Invoice in the email sent to them. You can enable online payments by clicking the gear icon in the upper-right corner of the screen, selecting Company settings in the first column, and then clicking Sales.


Step 1: Navigate To the Receive Payment Screen

Click on + New above the left menu bar and then select Receive payment in the first column.

Opening the Receive payment screen in QuickBooks Online.

Open the Receive payment screen in QuickBooks Online


Step 2: Enter the Credit Card Information in the Receive Payment Screen

The Receive Payment screen should be completed as shown in our guide on how to receive payments—except the payment method should be changed to a credit card. Click the drop-down menu under Payment method and select the credit card processor.

Entering payment method for an invoice payment.

Enter payment method for an invoice payment

Click Enter credit card details to open a window to input the customer’s credit card account information:

Entering credit card information to receive payment on an invoice.

Enter credit card information to receive payment on an invoice

Once the credit card information is entered, click the green Use this info button to continue. The credit card hasn’t yet been charged, and you have 10 minutes to complete the transaction before the credit card information is removed.


Step 3: Save the Payment to Process the Credit Card Transaction

The Receive Payment screen will now show the last four numbers of the credit card to be charged.

Receive Payment screen with credit card information.

Receive Payment screen with credit card information

Click the green Save and close button to process the credit card transaction and charge your customer’s credit card


What Happens Next

The credit card payments you received won’t be reflected in your bank account register until the funds are transferred from QuickBooks Payments. Once the funds are in your bank, QuickBooks will record the deposits and related processing fees to the account registers you specified in the QuickBooks Payments options discussed above.

What Are the Benefits of Using a QuickBooks Payments Account?

  • There’s nothing to install for QuickBooks Payments to work with QuickBooks Online.
  • Your accounts and financial statements are always up-to-date since QuickBooks Payments is integrated into QuickBooks.
  • Your customers can make payments online by clicking the Pay Now button on their emailed invoices.
  • You can accept payments using your mobile device via the QuickBooks Online mobile app.
  • Payments are deposited to your bank account, on average, within two or three business days after the transaction date.

Wrap Up

Congratulations on completing another QuickBooks course. You just learned how to process credit card payments in QuickBooks Online through QuickBooks Payments. The next guide in our series of free QuickBooks tutorials is how to record credit card sales with a third-party credit card processor, which will teach you how to enter credit card sales when using a non-QuickBooks-integrated processor.

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About the Author

Mark Calatrava

Find Mark OnLinkedIn

Mark Calatrava

Mark Calatrava is an accounting expert for Fit Small Business. He has covered more than 50 accounting software for small businesses and niche industries and has developed an in-depth knowledge of the important features of accounting software and how the importance of these features vary by business.

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