How to record customers' bounced cheques using Accounts Receivable

Learn how to handle the accounting in QuickBooks Online when a customer's cheque bounces. Or follow these steps if you need to record one of your own bounced cheques.

Did your customer pay for their invoice with a cheque that didn't go through? Unfortunately, customer cheques sometimes bounce. We're here to show you how to handle the accounting in QuickBooks Online.

What you need to record

These steps can be complicated, but doing them correctly balances your accounts so you have a clear record of what happened. Here's what we need to do:

• Show the amount of the customer's check was deducted from your bank balance.
• Show the bank charged you a fee.
• Mark the customer's invoice they were supposed to pay as "open" and unpaid.
• Charge your customer a fee for the inconvenience (this is up to you).
• Send a statement to tell the customer what they owe you for the original invoice and any fees.

How to record a bounced cheque

There are a few ways to handle the accounting. You can use an expense or a journal entry. Follow the method that works best for you.

• Record a customer's bounced cheque with an expense in QuickBooks Online
• Record a customer's bounced cheque with a journal entry in QuickBooks Online