FROM THE BLOG

How to Handle a returned Check in QuickBooks Online

This is a brief instructional post on how to record bounced checks in QuickBooks Online. This method can also be applied to Desktop versions of QuickBooks.  Embedded below is also the video version of these instructions including a run through of the entire sales cycle.

  1. Create a product or service in your item list called “returned check”, the income account is going to be the bank account that the check bounced from. This item is going to be used in creating a new invoice for the bounced funds.
  2. If you are going to want to invoice for Returned Check charges by the bank,  you are going to want to create another item in your product/service list called NSF Fees. You can use an existing income account or create a new income account if you want to track NSF fees invoiced to customers.
  3. Create a new invoice to the customer whose check bounced. The first item on the invoice is going to be the item created in Step 1 and you want to enter a description of the returned check and the amount of the returned check.
  4. The second item on the invoice is going to be the item created in Step 2. Enter the amount you are going to be charging as an NSF fee.
  5. Now your invoice total should add up to the amount of the bounced check plus the amount charged for the NSF Fees.  Save and send the new invoice to the customer.

The result will be the deduction of the bounced check from the bank account and a new invoice in accounts receivable for the amount still owed in addition to the new charge for NSF fees.  This is the proper way to handle bounced checks in QuickBooks Online.

As always please feel free to comment and ask questions. Subscribe to my blog and YouTube channel for more informative posts in the near future. Thank you.

2 comments

  1. Mellisa Spivey

    on

    Reply

    Thank you!! Quick Question – how do I get the Bank Charge to show up on the register so that I can reconcile the account?

    • Ofir Gabay

      on

      Reply

      You’re welcome and thank you for the question. The bank charge will be added to the register the way you would any other expense, either manually or through the downloaded bank transactions. The reconciliation process should remain the same. I hope this helps!

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