Reversing Direct Deposit Payroll Checks Inside QBO Payroll

by

Payroll & Merchant Services

Mistakes happen, even when making payroll payments. Everyone makes them, even if you are a seasoned veteran of QuickBooks Online Payroll.

A recent enhancement within QuickBooks Online Payroll makes finding, using, and accelerating Direct Deposit Payroll reversal requests easier.

An all too common mistake:

Suppose you or your clients use QuickBooks Online Payroll (within the United States), and an employee or contractor was accidentally paid twice, or the wrong employee or contractor was paid. In that case, you or your clients can now reverse a direct deposit payroll payment within 5 days of the pay date from within QuickBooks Online Payroll at no additional cost1. But this doesn't guarantee that the funds will be recovered. 

You can only reverse a Direct Deposit Paycheck if:

  • The reason complies with ACH or EFT laws, such as duplicate or unintended payments.
  • The direct deposit paycheck wasn't rejected.
  • It's within 5 (US) banking days of the paycheck date and before noon Pacific Time. Be aware that the posting date is the first day of the 5 banking day period.
  • The bank account from which you want to reverse funds must still appear in the employee's profile.

Reversing a QuickBooks Online Payroll check

You may be able to request a reversal within QuickBooks Online Payroll:

  • Go to Reports
  • Choose Paycheck list
  • Select the Paycheck(s) you want to reverse. 
  • Choose Reverse.
  • Select the Reversal Reason (from the drop-down list) for the direct deposit reversal.

Verification of the Reversal Request within QuickBooks Online

  • Check the bank account used for direct deposit of the Paycheck you requested reversal of.
  • If the reversal was successful, a deposit for the Paycheck should appear within 7-10 business days of the reversal request date.
  • If the reversal was successful, and the funds have been returned to your bank account, Void the reversed Paycheck.
  • If the deposit has not been made to the bank account used for the direct deposit of the Paycheck, you requested reversal of, and more than 10 days have elapsed since the reversal request date, it means the reversal request was unsuccessful.
  • In the event of an unsuccessful reversal request, as described in # 4 above, Do Not Void the Paycheck.
  • You must work with the employee(s) to either get the money back or apply the payment(s) made in error to the next payroll and reduce the upcoming Paycheck(s) by the amounts not returned.

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Footnotes and Disclosures:

Footnote-Intuit QuickBooks Disclosure:

1 - QuickBooks Online Payroll: There may be a $75 charge even if the reversal is unsuccessful. 

Insightful Accountant Disclosures:

Feature content was adapted from Intuit media source content and QuickBooks Online 'In-product Help'. Graphic content adapted in part from Intuit media source content. Content created or otherwise adapted by Insightful Accountant from Intuit source content is furnished for educational purposes only.

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