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Manage a bounced cheque you wrote

by Intuit Updated 1 year ago

How do you handle a cheque returned by your supplier due to non-sufficient funds? Learn how to record a bounced cheque transaction in QuickBooks by creating a journal entry and a bill payment cheque.

IMPORTANT: Do not void the original Bill Payment Cheque because it may be in a previous accounting period.

Step 1: Enter a reversing journal entry

  1. From the Company menu, select Make General Journal Entries.
  2. Make sure the Date and Entry No are correct.
  3. Debit the current account for the amount of the NSF cheque.
  4. Credit the A/P account for the amount of the NSF cheque.
  5. Enter the Supplier name.
  6. (Optional) Enter memos and classes.
  7. Select Save & Close.

Step 2: Un-link the bill from the payment cheque and link it to the journal entry

  1. Open the original bill payment cheque.
  2. Uncheck the bill(s) originally paid by the bill payment cheque.
  3. Check the Journal Entry created in Step 1.
  4. Enter a Memo to indicate the cheque was returned for NSF.
  5. Select Save & Close.

Step 3: Enter a bill for the overdraft charges

Do this step ONLY if the supplier charges you for the overdraft fee.

  1. From the Suppliers menu, select Enter Bills.
  2. Enter the Supplier name.
  3. On either the Expenses Tab or the Item Tab, enter the overdraft charges with the appropriate account or item.
  4. Enter a Memo to indicate that these are charges for an NSF bill payment cheque.
  5. Select Save & Close.

Step 4: Create a new bill payment cheque

Since you un-link the original bill payment cheque from the bill(s), they were marked unpaid and should re-appear in the Pay Bills window.

  1. From the Suppliers menu, select Pay Bills.
  2. Select the bill(s) originally paid by the NSF bill payment cheque and the bill for overdraft charge (if applicable).
  3. Complete all other required information.
  4. Select Pay Selected Bills.

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