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Record a bounced cheque using an invoice

by Intuit•2• Updated 2 weeks ago

Learn how to record a bounced cheque using an invoice in QuickBooks Online.

Did the cheque from your customer bounce? Don’t worry. You can record the bounced cheque and any service fees associated with it as items in an invoice.

Prerequisites

Before you can issue an invoice to record a bounced cheque, you need two items: one to reverse the bounced cheque in your bank register, and one to account for any service fees.

Go to Settings and select Products and services (Take me there).
Select New, then Service.
In the Name, enter Bounced cheque.
From the Income account ▼ dropdown, select the bank account you used to receive the bounced cheque.
Select Save and close.
Back in Products and services, select New, then select Service.
In the Name, enter Bounced cheque fees.
From the Income account ▼ dropdown, select or add the income account Bounced cheque fees. Or, select an expense account you use to track bank charges.
Select Save and close.

Step 1: Create an invoice for the bounced cheque and fee

Start by creating the invoice with the bounced cheque and service cost items.

Select + New, then select Invoice.
From the Add Customer ▼ dropdown, select the name of the customer who wrote the bounced cheque.
In the Invoice date, select the date the cheque bounced.
In the Product/service column, select the service Bounced cheque and enter the amount of the bounced cheque in Amount.
In the Product/service column, select the service Bounced cheque fees and enter the amount to charge the customer for the bounced cheque in Amount.
Select Review and send.
Send the invoice to your customer.

Add the bank service charge to your accounts.

Step 2: Record the bank’s bounced cheque fees

Select + New, then select Expense.
From the Payment account ▼ dropdown, select the bank account you used to record the bounced cheque.
In the Payment Date, select the date the cheque bounced.
In the Ref no., enter Bounced cheque fees.
From the Category ▼ dropdown, select the income account Bounced cheque fees or the expense account you use to track bank charges.
Important: Make sure you select the same account you used for the Bounced Cheque Fees item you created.
Enter the amount your bank charged you for the bounced cheque in the Amount.
Select Save and close.

Next steps

Once you get the payment from your customer for the bounced cheque, record it.

Select + New, then select Receive payment.
From the Customer ▼ dropdown, select the customer who paid using the bounced cheque.
Enter the Payment Date and Payment method for the new payment.
From the Deposit To ▼ dropdown, select the same bank account you used to receive the bounced cheque.
Select the invoice you created from the Outstanding Transactions list, then enter the amount you received in the Payment.
Select Save and close.