How to Use QuickBooks Virtual Checks
Every month we receive dozens of queries from users who don't know how to enter QuickBooks transactions that involve "virtual checks". Some samples:
"I use my bank's ACH services to pay vendor bills, but in the QuickBooks Pay Bills window I only have the option to write checks or use credit cards." "My credit card is paid in full with automatic withdrawals from my bank account. How do I enter the transaction with all the appropriate expense categories, since I can't use Write Checks because this isn't a check?". "How do I enter a purchase I made with a debit card, since it isn't a check?"
In every case, the QuickBooks transaction IS a check. Withdrawals from your bank account are checks. A physical check has a check number; all other checks (virtual checks) lack a check number but in bookkeeping, these are still checks.
When you use a virtual check (in the QuickBooks Write Checks window, the Pay Bills window, or directly in the bank account register) you can either leave the check number blank or use a "code" for the check (e.g. ACH, E-Check, DebitCard, etc.). The decision about using a code or not depends on the way your bank arranges your statement. Our bank account, for example, lists all physical checks first and then lists all electronic withdrawals in date order. To make it easier to reconcile the bank in QuickBooks, we leave check numbers blank for virtual checks. If your bank lists ACH transactions separately from Debit Card transactions, then using codes will make it easier to use the QuickBooks Reconcile window.