How To Record Bounced Check in QuickBooks

Last Updated on by Editor Team

Bounced check means there are not sufficient fund category checks that are returned back due to lack of required fund amount. These bounced checks can be a real annoyance to keep track of on your books. Bank will debit the charge for a bounced check and you have to contact customer care to communicate that their check has bounced and you have to request another form of payment. So, here are the easy steps on how to record bounced check in QuickBooks.

How to  Record Bounced Check in QuickBooks

In order to record the bounced checks transaction users have two options depending on the mode of QuickBooks used. Option first Detail below is suitable for users employing Quickbooks in single user mode, while option second is for multi user mode of QuickBooks users.

QuickBooks in Single User Mode

If the software is used in single user mode then the user can take support of Record Bounced check tool to record these checks and Non sufficient funds transactions. Although, before following the steps, there are some points to keep in mind as detailed:

  • The feature of Record Bounced Check can only be used in case of check payments.
  • If returning an ACH item, first turn the payment category to check the payment and then go to the steps of this method.
  • Generally, if the icon for Record Bounced check is colored Grey or if the payment type tab is still grey because of which the user is not complete the steps, then the user should follow these steps detailed under method 2.

Here are some steps to follow in order to record bounced checks are:-

  1. Go to the main window of QuickBooks, locate the Customer’s menu and then click on the customer center option.
  2. Handling and Select the tab called transactions and then on received Payments.
  3. Select and double click on Non-sufficient fund payment transactions.
  4. Under the window receive payment Screen from the main menu tab select the option called record bounced check. It is sure that the check or transaction selected should not be in the process of being cleared from the undeposited funds account as it is to get clearance from the bank.
  5. Under the screen of management Bounced Check, give the following details and then click on Next:
  6. The software will show a bounced check summary under the details of what has happened till now is shown.
    Different types of common of common scenarios that can be encountered as follows:-
    Invoices are marked unpaid.
    • Invoices are created with specific charges against the customer .
    • Some charge will be taken from the bank account.
  7. Click on the Finish tab.
  8. The indicator of Bounced check will be shown under customers payment informing the user that they have employed the bounced check feature for the specified payment
  9. Lastly a Journal Entry for this transaction is generated with Accounts Receivable being debited and Bank Account being credited
  10. The invoice is then referred to as Unpaid so that the user can send the invoice to the customer again.

QuickBooks under Multi user Mode

Here, the user is employing QuickBooks in Multi-user mode and thus has to manually record the bounced check or Non-sufficient funds. Follow the steps for the same:

  1. Create an account along with items under tracking of NSF checks.
  2. Now keep a record of Non sufficient funds from the bank.
  3. Next step is to reverse the transaction of the original payment.
  4. Lastly, again an optional step, users can charge their customer for the NSF fees charged by the bank.

Significance of Recording Bounced Check in QuickBooks

It is important to record a bounced check in QuickBooks because it will not only affect your bank account but also your accounts receivable balance. To resolve your bank account, you must record the bounced check and any additional fees that bank charges. Also, return the customer’s payment to increase your account balance.

When bounce the customer checks, following effect are show:-

Bank account: Your bank account will decrease the amount of bounced checks.

Accounts receivable: The balance of account receivable will be increased if the customer’s payment did not go through.

Bounced check fees: The bank takes a charge for non-sufficient funds (NSF fee).

In this article, you have already known above how to record checks in QuickBooks. So, we are hoping that you can easily handle non-sufficient funds or bounced checks easily.

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