There are 3 stages involved in creating an online banking file (in ABA format) that is sent to the bank: Setting up a new account, processing transactions and creating the online banking file.
Stage One – Setting up Bank Accounts and Records: This involves setting your bank account, or creating a new bank account, and updating records for employees and suppliers.
- Setting the Bank Account: You need to set up a new bank account in QuickBooks that reflects the real-life bank account used to draw your payments from. Apart from the standard bank account details QuickBooks requires when setting up an account, you’ll need to include your business’s APCA number, which is provided to you by the bank, and talk to your bank and ask for the ability to use “ABA files to pay online”.
You can also enable a bank account for online banking by editing its properties and enabling Online Account access. Go to your chart of accounts (go to the List menu and click Chart of Accounts) and then select the account. Right-click and select Edit. Click the Online Bank Details tab, and then click to select Online Account Access, enter your bank BSB, account # and APCA #.
- Updating Employee Records: For each employee using the banking (online) option, you’ll need to change their pay method to Bank (Online), and include account details in the Bank Details section of their Employee Record. Go to Payroll Centre then Employees select one and double-click, Change Tabs (dropdown) click Payroll and Compensation Information, Payment Method top RHS, (dropdown) Bank (Online), Direct Deposit lower RHS, enter BSB, Account #, OK. Employee must have an employee number also.
- Updating Supplier Records: For each supplier being paid through banking (online), you’ll need to change set their pay method to Bank (Online) and include account details in the Bank Details tab of the Supplier Record. Go to Supplier Centre, Suppliers select supplier and double click, go to Bank Details tab, enter Bank Account Name (eg supplier name) Bank, BSB, Lodgement Reference (eg your company name), OK.
Stage Two – Processing Transactions: This involves processing payroll transactions as normal or paying supplier bills as normal. QuickBooks will identify payments set up for banking online and have those ready to include when creating an online banking file.
When you pay bills, the Payment Method at the bottom should be Bank Online, Pay Selected Bills.
When you pay employees, the pay will know from the card it is for online payment.
Stage Three – Creating Online Banking (ABA) Files: This is where you go to the QuickBooks Online Banking Centre and specify the payroll period. After reviewing the online banking information, you can preview and create an online banking file.
Before you create an online banking file, you should have:
- Enabled your company bank account for online access;
- Set up bank account details for each employee or supplier to be paid through the bank (online) method;
- Processed payroll or payments for suppliers;
- Checked that the text in the Legal Name field is no longer than 26 characters.
Create an Online Banking File:
- Go to Banking menu and click Online Banking Centre.
- Scroll to the section To Bank
- At Process On choose the date you want the payment to be made, using the calendar from the Date to be Processed field.
- Enter a payment description. Eg wages w/e Mar23
If no payment description is entered, a description of “payment” will display in the ABA file by default.
- Select payees from the list below.
Each payee must have a bank account defined for them under their employee or supplier record. This includes details for Bank Account Name, Number and Branch Code. In addition, employees must have an employee number.
- Click Preview ABA File if you wish to review the ABA file before creating it.
- Click Create ABA File.
QuickBooks displays the standard Windows Save As dialog box with *.ABA entered in the file name.
- Enter a name for the online banking file (leaving the .ABA) and choose a location to save it. Eg Desktop is easiest.
QuickBooks provides a default folder within the QB installation directory called Export Files/ ABA Files. You may choose to save the ABA file in this directory, or in any other directory of your choice.
- Click Save.
Your ABA file is now ready for upload to the relevant financial institution.
Go online to your bank and upload the file using the instructions given by your bank.
Need help? Not sure? Call for FREE 30min advice / strategy session today!