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Intuit

How to enter a returned or bounced cheque using Write Cheque

There may be situations in which you need to record bounced cheques and new customer payments.

Recording these transactions using the Cheque screen requires a number of steps, each outlined below:

Step 1: Enter the returned cheque with Write Cheque

The first step is to enter the bounced cheque into the Cheque window:

  1. Select the Plus icon (+) on the Toolbar.

  2. Under Suppliers, select Cheque.

  3. In the Payee field, select the name of the customer who issued the bounced cheque.
  4. From the Bank Account drop-down list, select your bank.
  5. In the Payment date field, enter the date the cheque bounced.

  6. Clear the Print Later checkbox and enter a note, such as NSF cheque, in the Cheque number field.
  7. Under Account details, select Accounts Receivable from the drop-down list in the Account column.
  8. Enter the amount of the bounced cheque in the Amount field.

  9. Select Save and close.

The bounced cheque is recorded.

The next step is to change the payment entry to apply to the bounced cheque.

Step 2: Change the payment entry

The next step is to change the payment entry to apply to the bounced cheque entry:

  1. From the left menu, select Sales or Invoicing.

  2. On the Customers tab, select the name of the customer who issued the bounced cheque to open the Transaction List.

  3. Locate and select the payment record you created for the bounced cheque.
  4. Select the checkbox of the bounced cheque (NSF cheque) entry.
  5. Clear the checkbox of the invoice the payment was originally applied to.
  6. Select Save and close.

The payment entry is changed to apply to the bounced cheque entry.

The next step is to create Service items for bounced cheques and fees to use in recording these charges.

If you have already created these Service items, you can skip that step and create an invoice for the bounced cheque fee.

Step 3: Create Service items for bounced cheques and fees

Create two Service items for returned cheques and associated fees to use when charging returned cheque fees to your customers:

  1. Select the Gear icon on the Toolbar.

  2. Under Lists, select Products and Services.

  3. Select New.

  4. In the Product/Service information panel, select Service.

  5. In the Name field, enter Bounced Cheque.

  6. From the Income account drop-down list, select the bank account the cheque was returned on.

  7. Select Save and new to create the second item.

  8. Name the second item Bounced Cheque Fee.

  9. From the Income account drop-down list, select or add an income account called Bounced Cheque Fees.


    Alternatively, you can select an expense account that you use to track your bank charges.

  10. Select Save and close.

The Service items can now be used.

The next step is to create an invoice for the bounced cheque fee.

Step 4: Create an invoice for the bounced cheque fee

To create an invoice for the returned cheque fee:

  1. Select the Plus icon (+) on the Toolbar.

  2. Under Customers, choose Invoice.

  3. Select the Customer name and enter the date the cheque bounced in the Invoice date field.

  4. In the Product/Service column, select the Bounced cheque fee item you created from the drop-down list.

  5. Enter the Amount to charge the customer for the bounced cheque.

  6. Select Save and close.

The invoice for the bounced cheque fee is created.

The next step is to enter the bank service charge as an expense.

Step 5: Enter the bank service charge

To enter an expense for the bank service charge:

  1. Select the Plus icon (+) on the Toolbar.

  2. Under Suppliers, select Expense.

  3. From the Bank/Credit account drop-down list, select your bank.

  4. In the Payment date field, enter the date the cheque bounced.

  5. Enter NSF fee in the Ref no. field.

  6. Under Account details, select the Bank Charges expense account from the drop-down list in the Account field.

  7. Enter the amount your bank charged you for the bounced cheque in the Amount column.

  8. Select Save and close.

The fee is recorded.

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The next step is to send a statement to the customer regarding the bounced cheque and fees.

Step 6: Print and send the statement to your customer

To send a statement regarding the bounced cheque and fees to the customer:

  1. From the left menu, select Sales or Invoicing.

  2. On the Customers tab, select the name of the customer who issued the bounced cheque to open the Transaction List.

  3. Select Statement from the New transaction drop-down list.

  4. Select the Statement Type to create from the drop-down list.

  5. Set the Statement Date, Start Date, and End Date.

    .
  6. Select Print to generate a copy of the statement, or select Save and send to create an email to send to the customer with the statement attached.

The statement is generated for the customer.

When the payment is received, the next step is to record the new payment.

Step 7: Record the new payment from your customer

To record the customer payment:

  1. Select the Plus icon (+) on the Toolbar.

  2. Under Customers, choose Receive Payment.

  3. Select the customer from the Customer drop-down list.

  4. Enter the Payment date and Payment method for the new payment.

  5. Select the Deposit to account from the drop-down list.

  6. Enter the Amount received.

  7. Select the invoice from the Outstanding Transactions list.
  8. Select Save and close.

The payment is recorded.

Now you know how to account for a returned cheque.