As a business owner, there are times when you may receive a check or payment from a customer, and it ends up bouncing due to insufficient funds in their account.
It’s common to wonder how to handle all of the different pieces in QuickBooks to make sure both the customer’s account and your bank account are entered properly.
Guess what… that’s what this tip is all about 🤓
Whether you need to know this now or sometime in the future, you’ll be glad you took the time to learn it and save this video to reference in the future. 🙌🏻
If you’re looking for the Online version of this video, click here.
Follow these steps on “How to Handle Non-Sufficient Funds (NSF) or Bounced Payments From Customers in QuickBooks Desktop:”
Entering Non-Sufficient Funds (NSF) or Bounced Checks:
- Go to Customer Center
- Find the Customer that bounced the check
- Open the payment
- Up above, click “Record Bounced Check”
- “Manage Bounced Check” screen will show
- Enter “Bank Fee”
- “Date”
- “Expense Account”
- “Class”
- “Customer Fee”
- Click “Next”
- “Bounced Check Summary”
- Click “Finish”
- Choose “Save & Close”
Review the Customer’s Account to verify that it all looks accurate.
Review What Happened in The Bank Account:
- Go up to Banking
- Use Register
**If the form of payment is a Credit Card in Customer Payment, just switch it to Check, and then save it to see the Record Bounced Check Button
Share in the comments below if this helped you and if you had any ah-ha’s 💡
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That was so good.
Thank you for the information.
Hi Kim,
You’re welcome. 🥰
We’re so glad you enjoyed the video.
Thank you for being part of our community!
Have a great day.
Robyn, Team Candus
Can you do a video on howa to handle a bounced electronic payment ( bank) awhen custonmer used merchant services ??
Thank You
Karin
Hi Karin,
Thank you for reaching out.
When a customer’s merchant services payment bounces, you’ll usually need to record the returned payment/reversal from the bank feed, reopen the customer’s invoice balance, and then record any merchant/bank fees separately so both the customer balance and bank account are correct. 😊
Thank you for being part of our community!
Have a great day.
Robyn, Team Candus
This was good information. I have always had to enter a bounced check with a journal entry because we have multiple users. It was not mentioned that if you have multiple users using QuickBooks, you will need to switch to single user mode to enter a bounced check. This makes it difficult because I have to wait for everyone to log off for the day. Journal entries have been easier in my situation. But, I can see the value in using the “Record Bounced Check” button because it frees up the invoice to apply a new payment.
Hi Michelle,
Thanks for reaching out and sharing the wonderful tip.
We’re glad to have you a part of our community!
Have a great day,
Robyn, Team Candus
How to record a bounced check that was entered as a sales receipt and not a payment. Also that check was in the previous month so it was reconciled with the statement and it bounced in the next month’s statement
Hi Fany,
Thank you for reaching out.
I’d recommend leaving it alone in the first month, and then remove it as a sale in the second month when it came out of the bank. I wouldn’t put it back on the AR, I would just remove it through either the check register or journal entry. If you want to show that the customer owes you, I’d create an invoice.
Thanks for being a part of our community!
Have a great day,
Samantha, Team Candus
great BUT you don’t show what to do when the customer brings you another check to reimburse the NSF check!!
Hi Marta,
Thank you for reaching out.
Based on what Candus teaches on how to handle the NSF, you would apply what the new payment to the customer balance.
Have a great day!
– Samantha, Team Candus
How would you handle a lost check. You paid a vendor but they never received the payment.
Hi Karen,
Thank you for reaching out.
Typically, we would reissue the check and make a note in QuickBooks or if you want to track all the details you’d void the other check and then write a new check. (You’d also contact the bank to process a stop payment on the original check).
If you’d like to learn more about how to optimize QuickBooks for your business, I recommend
checking out our Confidence with QuickBooks program. To learn more you can attend our Customizing QuickBooks workshop. Save your seat here:
https://CandusKampfer.com/workshop
Have a great day,
Samantha, Team Candus
Thank you! Great info!
Hi Judy,
Thanks for reaching out.
I’m so happy you enjoyed our video 🤗
If you’d like to learn more about how to optimize QuickBooks for your business, I recommend
checking out our Confidence with QuickBooks program. To learn more you can attend our Customizing QuickBooks workshop. Save your seat here:
https://CandusKampfer.com/workshop
Have a great day,
Samantha, Team Candus
The video is very helpful, however, the NSF checks I have received are part of the daily sales total, and not one invoice (no invoicing is done). How do I record in this example?
Hi Melissa,
Thank you for reaching out.
If you’re going straight to sales, you can handle it differently. You’d go back to the original income account.
I hope this helps!
Have a great day,
– Samantha, Team Candus
very helpful. it solved how to really enter returned check accounting wise.
Hi Lepido,
I am so glad this helped. Thanks for sharing.
Daniel – Team Candus
You do a very good job explaining not only QB but accounting procedures. I have been a bookkeeper for along time using QB. I like to watch your videos.
Thank you
Thank you so much! I’m so happy to hear you like our videos 😊 – Sam, Team Candus
What happens if I deposited the check? Will this method remove it from the deposit list also?
Hi Nicole,
Thank you for reaching out.
Sorry we missed your original question.
If you never created an invoice then you wouldn’t need to follow this process.
Instead, you would go to the register and go to straight to the income account.
If you would like to learn more about how to customize your QuickBooks, you can join our Customizing QuickBooks workshop here: https://CandusKampfer.com/workshop
Have a great day,
Samantha
Team Candus
How do you handle a bounced check given through Donations (Sales Receipts)?
Jan,
It’s the same way you’d put it back to A/R as shown on the video (if you want them to pay later/want an invoice), or you’d write an expense and reduce your “income/donations” account.
Have a great day!
Candus
What if the “record bounced check” option is greyed out?
Hi Cian,
Thanks for your questions. Candus does cover this at around the 5:55 mark of the video.
– Daniel Team Candus
Great information! Thank you!
Thanks, Sue.
We are so glad that you found it helpful.