Rejected ACH payments in QuickBooks can create serious disruptions in your business cash flow. Whether you’re using QuickBooks Online or QuickBooks Desktop with QuickBooks Payments, ACH (Automated Clearing House) transactions are one of the most convenient ways to receive customer payments.
However, when an ACH payment gets rejected, it can result in delayed income, additional fees, and reconciliation complications.
At QuickBooks Repair Pros, we regularly help businesses troubleshoot and resolve ACH payment rejection issues quickly and efficiently. If you’re currently dealing with a rejected ACH transaction, call 844-753-8012 for immediate expert assistance.
In this complete guide, we’ll explain:
- What ACH payments are
- Why ACH payments get rejected
- ACH return codes and what they mean
- Step-by-step process to fix rejected ACH payments
- How to record ACH return fees in QuickBooks
- Preventive strategies to avoid future rejections
Let’s get started.
What Is an ACH Payment in QuickBooks?
ACH (Automated Clearing House) is an electronic funds transfer system that allows money to move directly between bank accounts.
In QuickBooks, ACH payments are commonly used for:
- Customer invoice payments
- Recurring billing subscriptions
- Vendor payments
- Bank-to-bank transfers
- Payroll direct deposits
Compared to credit cards, ACH payments typically have lower processing fees, making them a cost-effective option for businesses.
However, ACH payments take longer to clear than credit card transactions, and they can be returned or rejected after submission.
What Does It Mean When an ACH Payment Is Rejected?
A rejected ACH payment means that the transaction was sent to the bank but could not be processed successfully. The receiving bank returns the payment with a specific ACH return code explaining why it failed.
When this happens in QuickBooks:
- The payment status changes
- Funds are not deposited
- A return fee may be charged
- Your accounts receivable balance may be affected
Ignoring ACH rejection errors can lead to inaccurate books and delayed collections.
Most Common Reasons for ACH Payment Rejections
Let’s review the most common causes of ACH return transactions.
1. Insufficient Funds (R01)
This is the most common ACH rejection reason.
The customer’s bank account does not have enough available balance to complete the transaction.
Solution:
Contact the customer and request repayment once funds are available.
2. Closed Account (R02)
The bank account used for payment has been permanently closed.
Solution:
Request updated bank details from the customer.
3. No Account / Unable to Locate Account (R03 / R04)
Incorrect bank account number was entered.
Solution:
Verify routing and account numbers carefully before resubmitting.
4. Unauthorized Transaction (R10)
Customer disputes the ACH charge and claims it was unauthorized.
Solution:
Provide proof of authorization (signed ACH form or agreement).
5. Payment Stopped (R08)
The customer requested their bank to stop the payment.
Solution:
Contact the customer to understand the reason before retrying.
6. Frozen or Restricted Account
The bank has temporarily restricted the account due to legal or compliance issues.
How to Check ACH Rejection Details in QuickBooks
To identify the exact reason:
- Open QuickBooks
- Go to Sales → Customers
- Locate the failed transaction
- Click on the payment
- Review the ACH return code and details
Understanding the rejection code is the key to fixing the issue properly.
If you’re unsure how to interpret return codes, contact QuickBooks Repair Pros at 844-753-8012 for expert help.
Step-by-Step Guide to Fix Rejected ACH Payments in QuickBooks
Step 1: Identify the Return Code
Never retry the payment blindly.
First, confirm the exact ACH return code.
Step 2: Notify the Customer Immediately
Send a polite notification explaining:
- The payment failed
- The reason (if available)
- Required corrective action
Professional communication prevents misunderstandings.