Learn how to fix a rejected or failed bank transfer payment in QuickBooks Online.
Bank transfer payments fail because of incorrect bank info or insufficient funds. Here’s how you can handle this issue to keep your books in order.
Note: See record a bounced check for issues with paper cheques.
In this article, you'll how learn to:
Identify the rejected payment
- Select + New, then select Bank deposit. All the undeposited payments will show.
- Look for the payment on the list.
- Take note of the payment details.
Step 1: Identify the rejected payment
Identify the rejected payment you need to fix.
- Sign in to QuickBooks Online.
- Select + New, then in the OTHER column, select Bank deposit. This shows you a list of undeposited payments.
- Find the rejected payment you need to fix, then take note of the payment details.
Create a service item to track the rejected bank transfer
- Go to Settings ⚙, then select Products & Services (Take me there).
- Select New, then select Service.
- Enter "Rejected bank transfer" for the name.
- Enter "Bank transfer payment received rejected by the bank" for the description.
- If the bank deposit is already deposited, select the bank account you deposited to under Income account. If you haven't made the deposit yet, select Undeposited funds.
- Select Save and close.
Step 2: Create a service item
Create a service item to track the rejected bank transfer.
- Go to Settings ⚙, then in the LISTS column, select Products and services.
- Select New, then select Service.
- In the Name field, enter “Rejected bank transfer”.
- In the Description field, enter "Bank transfer payment received rejected by the bank".
- From the Income account ▼ dropdown, select Undeposited Funds.
Note: If the payment is already deposited, select the bank account you deposited it to instead. - Select Save and close.
Create a new invoice
- Select + New, then select Invoice.
- Enter the customer whose payment got rejected.
- Add the Rejected bank transfer item you created in Step 2 to the invoice.
- Enter the total amount of the rejected payment.
- Make sure Tax isn’t selected.
- Select Save and close.
Step 3: Create a new invoice
Create a new invoice. You’ll need this in the following steps.
- Select + New, then in the CUSTOMERS column, select Invoice.
- From the Add customer ▼ dropdown, select the customer whose payment got rejected.
- In the Product or service section, select the dropdown under the Product/Service column. Then, select the Rejected bank transfer item you created in Step 2.
- Under the Amount column, enter the total amount of the rejected payment in the text field.
Note: Make sure you don’t select the Tax checkbox. You might have to turn off sales tax if needed. - Select Save and close.
Remove the payment from the original invoice
- Go to Sales, then select Invoices (Take me there).
- Select the invoice that has the rejected bank transfer payment, then select Edit invoice, or select Edit next to the rejected bank transfer payment.
- Select the Payment link to open the rejected payment.
- Uncheck the box beside the rejected bank transfer payment.
- Select Save and close.
- Select Save as a credit.
- Select Yes.
Note: You can now resend the invoice to the customer so they can make a new payment.
Step 4: Remove the rejected payment from the original invoice
Because the payment is rejected, you need to remove it from the original invoice.
- Go to Sales, then select Invoices.
- Find and select the invoice that has the rejected payment. Then, select Edit invoice.
Note: You may also select Edit in the ACTION column. This takes you to the same Edit invoice page. - Select Payment. Then, uncheck the box next to the rejected bank transfer payment.
- Select Save and close. Then, select Save as credit.
- Select Yes to confirm the action.
You may now resend the invoice to your customer so they can make a new payment.
Move the payment to the new invoice
- Go to Sales, then select Invoices (Take me there).
- Go to the invoice you created in Step 3, then select Receive payment.
- Check the box beside the rejected bank transfer payment to link it.
- Select Save and New.
- Select the invoice again, then select Delete from the More actions ▼ dropdown.
Step 5: Move the payment to the new invoice
Move the payment you removed in Step 4 to the new invoice you created in Step 3.
- Go to Sales, then select Invoices.
- Find and select the invoice you created in Step 3, then select Receive payment.
- Select the checkbox next to the rejected bank transfer payment to link it to the invoice.
- Select Save and close. This takes you back to the Invoices page.
- Find the invoice you created in Step 3.
- From the ACTION column, select the ▼ dropdown next to Print to view more actions.
- Select Delete.
Create an expense
- Select + New, then select Expense.
- Select the customer in the Payee ▼ dropdown.
- Select Undeposited Funds from the Payment account ▼ dropdown.
- Select Accounts Receivable (A/R) from the CATEGORY ▼ dropdown.
- Enter the rejected bank transfer amount in the AMOUNT field, then select Save and close.
Step 6: Create an expense item
Create an expense item where you can attach the rejected payment later on.
- Select + New, then select Expense.
- In the Payee ▼ dropdown, select the customer whose payment is rejected.
- From the Payment account ▼ dropdown, select Undeposited Funds.
- In the CATEGORY column, select the ▼ dropdown. Then, select Accounts Receivable (A/R).
- In the AMOUNT column, enter the total amount of the rejected payment in the text field.
- Select Save and close.
Attach the payment to the new expense
- Go to Settings ⚙, then select Chart of accounts (Take me there).
- Select Undeposited Funds, then select View register.
- Select the payment from the deleted invoice in Step 5, then select Edit.
- Check the box beside the expense that you created in Step 6.
- Select Save and close.
Step 7: Attach the rejected payment to the new expense item
Attach the rejected payment to the expense item you created in Step 6.
- Go to ⚙ Settings. Then in the YOUR COMPANY column, select Chart of accounts.
- Find and select Undeposited Funds. Then, select View register in the ACTION column.
- Find and select the payment from the invoice you deleted in Step 5. Then, select Edit.
- Select the checkbox next to the expense item you created in Step 6.
- Select Save and close.
Charge your customer for the rejected payment fee (optional)
Create a Rejected bank transfer fee item
- Go to Settings ⚙, then select Products & services (Take me there).
- Select New, then select Service.
- In the Name field, enter "Rejected bank transfer fee."
- Select or add an income account called Rejected bank transfer fees from the Income account ▼ dropdown. Or, select an expense account you already use to track your bank charges.
- Select Save and close.
Add the item to the original invoice and resend it
- Go to Sales, then select Invoices (Take me there).
- Select the original invoice, then select Edit.
- Select Rejected bank transfer fees from the Product/Service ▼ dropdown.
- Enter the fee amount in the Amount field.
- Select Review and send.
(Optional) Charge your customer for the rejected payment fee
If you decide to, you may charge your customer for the rejected payment fee.
- Go to Settings ⚙, then in the LIST column, select Products and services.
- Select New, then select Service.
- In the Name field, enter “Rejected bank transfer fee”.
- From the Income account ▼ dropdown, select or add “Rejected bank transfer fees”.
Note: You may select an expense account you already use to track your bank charges. - Select Save and close, then select Save and close again to confirm action.
- Go to Sales, then select Invoices.
- Find and select the original invoice with the rejected bank transfer payment. Then, select Edit.
- From the Product/Service ▼ dropdown, select Rejected bank transfer fees.
- In the Amount field, enter the amount of the rejected bank transfer fee.
- Select Review and send.