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stratify
June 23, 2024
Question

Accepting Prepaid Cards

  • June 23, 2024
  • 2 replies
  • 0 views

I do consulting and have a large client (Inc 5000) that just had their huge annual event. It was their 10th year anniversary hosting the event so they went completely overboard on practically everything, including gift cards they bought for staff and vendors. 

 

They now have hundreds of left over prepaid visa cards.

 

They’re asking all their vendors if they can pay future invoices with the prepaid cards until they run out.

 

 

My invoices are typically between $5k-$15k based on scope/projects. I invoice them 2-3 times a month.

 

A couple questions:

 

  • I’m assuming they would need to partially pay the invoice with all the cards until they completely paid it off, right?
  • Would it raise a red flag if an invoice was paid with so many different pre paid cards? From the googling I did, it seems like I could be flagged for money laundering?

 

Provided as much content as I could think of right now but let me know if there’s anything else to clarify! They’re a big client so if I could get them out of this tedious situation they’re in, I’m sure it would get me some brownie points. Just don’t want to put my account as risk for it.

 

Thanks in advance!

2 replies

G
GebelAlainaM
June 23, 2024

Hello there, @stratify.

 

Let me share insights about your concern with accepting prepaid cards for invoice payments in QuickBooks.

 

In QuickBooks, you can receive and process payments online, in person, or over the phone with QuickBooks Payments. Customers can pay using PayPal, Venmo, credit card, or ACH bank transfer.

 

If you use prepaid cards, you can manually track it when using QuickBooks. To get started, you can set up the liability account first using the steps below:

 

 

  1. Go to the Gear icon, select Chart of Accounts, and click New.
  2. For the Account Type drop-down, choose Other Current Liabilities.
  3. Pick Trust Accounts - Liabilities for the Detail Type.
  4. Enter the name of the account.
  5. Then, hit Save and Close.

 

Please refer to this article to learn more about handling gift certificates in QBO: Sell and Redeem Gift Cards or Certificates in QuickBooks Online.

 

Additionally, I agree that they would need to partially pay the invoice with all the cards until it's completely paid off since it's the proper way when using all the prepaid cards.

 

Moreover, you'll only be flagged if you use it outside QuickBooks, but since you'll be using it in QuickBooks by manual tracking, then it's okay.

 

Furthermore, I'm leaving this article for future reference in handling customer payments in QuickBooks:

 

 

Please keep me posted if you have clarification on handling payments using prepaid cards in QuickBooks. I'm always here to help you.

4
4Gal
June 24, 2024

@stratify 

You are correct. Your bank may flag incoming transactions and may reject them. If you are using QB Payment to accept the payments, I am not sure they will not allow it, Many payment gateways decline B2B payments with prepaid cards.

 

You may have 2 options:

1. Accept your payments by Paypal directly.

2. Use a brokerage company that is not located in the US as a workaround. They will accept payments via Paypal from your client and pay your invoices by ACH.

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