How To Record a Returned Check in QuickBooks?

Total Time: 26 minutes

1. Step

   First, you need to record the reduced amount in your bank balance.

2. Step

   For doing this, go to the ‘New’ button in the top-left menu bar.

3. Step

   You will see the ‘Vendors’ drop-down.

4. Step

   Under the drop-down, click on the ‘Expense’ option.

5. Step

   The expense entry has increased the Account Receivables and reduced the bank balance.

   You will see the following details:

   ➤ Payee: The customer whose check is returned.
   ➤ Payment account: Bank account from where the check is returned.
   ➤ Payment date: Date when the bank notified you about the returned check.
   ➤ Amount: Amount of the returned check.
   ➤ Payment method: Cash as the payment method.
   After that, click on the ‘Save and Close’ button.

   Note:- Remember, do not delete the Entry of the original invoice. This will lead to problems in Reconciling your bank account balance with your QuickBooks account balance.

6. Step

   Now, open the original invoice.

7. Step

   Mark the invoice as ‘Returned or Bounced’ and send it back to the customer.

8. Step

   Go to the ‘Sales’ option in the top-left menu bar.

9. Step

   Move to the ‘Customers’ tab.

10. Step

    Scroll to the bottom to look for the customer whose check has been returned.

11. Step

    After you find that customer, click on their name.

12. Step

    This will open the list of transactions of that customer.

13. Step

    From the list of the customer’s transactions, move the original invoice and payment that is originally received.

14. Step

    You will notice that the paid check transactions are marked ‘Paid’ in the green option.

15. Step

    The returned check transaction is marked as ‘Closed’ in green color.

16. Step

    Click on the ‘Closed’ option and this will open the details of this particular transaction.

17. Step

    After that, you need to re-open the invoice.

18. Step

    For doing this, un-checkmark the box that is located on the left-hand side of the invoice.

19. Step

    On the other hand, check-mark the box to the left of the check that was made first.

20. Step

    Click on the ‘Save and Close’ green-colored button.

21. Step

    Now, you need to record the NSF (Non-Sufficient Funds) fee that is charged by the bank.

22. Step

    To record this fee, you need to create a ‘Service Item’ that will mark and bill the fee accurately.

23. Step

    Go to the ‘Sales’ tab from the left menu bar.

24. Step

    Select the ‘Products and Services’ option.

25. Step

    In the window of products and services, click on the ‘New’ button display as in the green-colored option.

26. Step

    Enter the information about Products and Services.

27. Step

    After that, click on the ‘New’ option.

28. Step

    In the first column of ‘Customers’, select the ‘Invoice’ option.

29. Step

    This will open a new invoice screen.

30. Step

    In the ‘Billable Expense’, Click on the ‘Add’ option.

31. Step

    Enter the NSF fee amount and details.

32. Step

    Click on the ‘Save and Send’ option.