There are two options available in QuickBooks Desktop for recording checks that are returned due to lack of funds in a customer's account also known as bounced checks. Option 1 works ONLY if you are in Single-user mode. If you need to record bounced checks while in Multi-user mode, you need to follow Option 2 for manually recording NSF.
The Record Bounced Check feature only applies to Check payments. If you have a returned ACH item, change the payment type to check then follow these instructions. If the Record Bounced Check icon remains grayed out, or if you are unable to follow these steps due to the payment type being grayed out, please follow steps in Option 2 to manually record the bounced check.
Follow these steps if you need to record bounced checks while you are in multi-user mode:
Step 1: Create an account and an item for tracking NSF checks
Step 2: (Optional) Record the NSF fee from your bank
Step 3: Reverse the original payment
Step 4: (Optional) Charge your customer for the bank NSF fee