How do I correct a a payment that was listed as a bill but was paid by a check. Error was discovered when then bank traction has it listed as a Return Online

Hello, Sharonlynn.

The Return Online transaction in your bank feed indicates that an online payment you attempted to make failed, resulting in the payment being created as a check instead. In this situation, we need to unlink the incorrect payment entry and then create a new, correct one.

First, let's correct the initial entry and change the bill's status back to unpaid. Here's how:

1. Go to the Expenses & Bills.
2. Locate the vendor associated with the incorrect payment.
3. In the Transaction list, find the bill payment transaction that was incorrectly recorded. 
4. Select the Bill and uncheck it.
5. Once done, click Save and close.

Next, create a new transaction to reflect the check payment. Note that after you save the bill payment, it will automatically be recorded as paid by check.

1. Navigate to Plus Create and select Pay Bills.
2. Choose the bill from which you just unlinked the payment.
3. Enter the correct Check number and the Payment date.
4. Ensure the amount matches the original bill.
5. Click Save and Close. It will accurately record the bill as paid by check.

After that, since this transaction is not an actual expense but rather a reversal, you need to Exclude it from your bank feed. Find the Return Online transaction in the Banking tab that represents the failed online payment. It will prevent being added to your books as a new transaction and keep your bank account balance accurate within QuickBooks. See screenshot below:

If you need more help, feel free to reach out to us here in the Community forum.