Follow the guidelines provided in this article to record bounced or NSF checks in QuickBooks Desktop. These steps can be performed in both Windows and Mac OS.

The NSF or bounced checks can easily be recorded from customers through the Record Bounced Check feature of QuickBooks. With QuickBooks, you can go through each information to keep your account managed.

QuickBooks for Windows

Important: Only the single-user mode supports the Record Bounced Check feature. Also, this feature is only applied to the check payment over the Customer Payment window. If there are some returned ACH items, you need to select the payment type to Check before moving onto the steps. If you see the payment method is not available or grayed out, you need to go to Option 2 directly.

Option 1: Use the Record Bounced Check feature

  • Go to the Customers menu and click on Customer Center.
  • Go to the Transactions tab and click on Received Payments.
  • Locate the payment and double-click on the same.
  • You will be redirected to the receive payments window. Click on Record Bounced Check option.

Note: Make sure that the check is not pending to be cleared in the Undeposited Funds account. Because the need check would be required to clear the bank in order to bounce.

  • From the Manage Bounced Check screen, provide following details, and then click on Next. Note: Each field is optional. These fields can be left blank as well if there are no additional charges from the bank.
    • Bank Fee and Date
    • Expense Account for the Bank Fee
    • Class
    • Customer Fee (how much you will charge the customer)
  • You will see the Bounced Check Summary in QuickBooks. For example, you may see:
    • The following invoices will be marked unpaid
    • The following fees will be deducted from your bank account.
    • This invoice will be created for the fee you want to charge your customer.
  • Click on Finish.

Option 2: Manually record bounced check

  • Track all the bounced checks and their associates charges by setting up an item and income account. Important: You only need to set up the record once. You can directly go to step 2 if you this was done already.
    • Create an income account:
      • Type: Income Account
      • Account Name: Bounced Checks Income
    • Create Bad Check Charge item:
    • Type: Other Charge
      • Item Name: Bad Check Charge
      • Amount or %: Leave it at 0.00
      • Tax Code: Non-taxable
      • Account: Select Bounced Checks Income (created in step a).
  • Reverse the original payment by creating a journal entry.
    • Go to the Company menu and click on the Make General Journal Entries option.
    • From the General Entries Journal Entries screen, debit your account receivables of the NSF check.
    • You can enter a note in the Memo section to describe the transaction. Example: Bounced check #123 – NSF
    • Choose the customer or job name linked with the NSF check.
    • Add the checking or bank account where the original deposit is received.
    • Click on the Save & Close.
  • Switch the payment for the invoice to the reversing journal entry.
    • Go to the Reports menu and choose Customers Receivables.
    • Now, click on Customer Balance Detail option.
    • Double-click on the actual payment line for the NSF transaction.
    • Go to the Receive Payments screen and take the checkmark to the reversing journal entry.
    • Click on Save & Close.

Important: The bank account will be reduced with the bounced check amount. The invoice containing this check will be marked as unpaid.

  • (Optional) Resend open invoice
    • Open the invoice from where the bounced check came.
    • Include the item Bad Check Charge. (created in step 1).  Note: Because this whole step is optional, you can skip it if no other charges are there from the bank.
    • Click on Email from the Main tab and then click on Send.

QuickBooks Desktop For Mac

Important: The Bounced Check feature can only be used when the customer payment check is already submitted in QuickBooks and not deposited to the Undeposited Fund account.

  • From the Customers menu, choose Receive Payment.
  • Go to the Bounced Check option and provide the required information. QuickBooks may create a bank service charge expense account in case it is not already created.
  • Click on Next. You will get a summarized explanation regarding the invoice, check, and bank fees.
  • Click on Record. Now, your invoice is unpaid and outstanding. Your customer’s Bounced Check is also added to it. However, if there are no Bounced Check, QuickBooks will automatically create a Returned Check Charges income account.

Note: To reverse any payment, QuickBooks may also create a journal entry. You can see the details by double-clicking on the journal entry.

The provided solutions should be enough for you to manage non-sufficient funds or bounced checks from customers. In case you have a query or facing any issue during the process, you can get in touch with our customer representative by dialing the toll-free QuickBooks Support Phone Number +1800-324-6955.

Handle Non-Sufficient Funds (NSF) Or Bounced Check From Customers

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