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CQCTAY
Level 1

Bounced Checks

Hello, 

So I took over management of a Auto Body Shop, 

I'm trying to fix their book keeping. The previous manager had bounced several checks to several companies. He had recorded the returns as a deposit and categorized them in a banking category they made called Returned Checks. and returned debits as Returned Debits also a banking category. I don't think this is the right way to do it. I saw they should have been put into A/P category. He didn't make bills or invoices for these bounced checks. I only have copies of the checks, and bank statements that show the returns and the retrys by vendor. I want to fix it. These transaction go back to August, he had reconciled all the months. So the only thing I can think of is to Undo the reconciliations and re do them. 

 

Solved
Best answer January 13, 2022

Best Answers
Rea_M
QuickBooks Team

Bounced Checks

I'll make sure you can enter your bounced checks in QuickBooks Online (QBO) accordingly, @CQCTAY. This way, you're able to fix your company's bookkeeping.

 

When checks bounce, your bank charges you an NSF or bank fee. How you plan to handle the fees influences how to handle your accounting. There are different scenarios on how to record them based on how they bounced. Check out the following:

 

  • Your check bounced, but your bank covered it and charged you a bank fee.
  • Your check bounced, your bank didn't cover it, and the vendor returned the check without redepositing it.
  • Your check bounced, your bank didn't cover it, and the vendor keeps redepositing the check.

 

Choose the appropriate scenario above and then refer to this article the step-by-step guide: What to do if your check bounces and your bank account has non-sufficient funds.

 

Once you're done, you'll have to undo your reconciliations. Then, when everything is all polished, reconcile your account again to keep it updated. I'd encourage you to perform this process every month to monitor your transactions accordingly. You can refer to this article for the detailed steps: Reconcile an account in QuickBooks Online.

 

Please don't hesitate to keep me posted if you have other concerns about recording bounced checks in QBO. You can drop a comment below, and I'll gladly help. Take care, and I wish you continued success, @CQCTAY.

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3 Comments 3
Rea_M
QuickBooks Team

Bounced Checks

I'll make sure you can enter your bounced checks in QuickBooks Online (QBO) accordingly, @CQCTAY. This way, you're able to fix your company's bookkeeping.

 

When checks bounce, your bank charges you an NSF or bank fee. How you plan to handle the fees influences how to handle your accounting. There are different scenarios on how to record them based on how they bounced. Check out the following:

 

  • Your check bounced, but your bank covered it and charged you a bank fee.
  • Your check bounced, your bank didn't cover it, and the vendor returned the check without redepositing it.
  • Your check bounced, your bank didn't cover it, and the vendor keeps redepositing the check.

 

Choose the appropriate scenario above and then refer to this article the step-by-step guide: What to do if your check bounces and your bank account has non-sufficient funds.

 

Once you're done, you'll have to undo your reconciliations. Then, when everything is all polished, reconcile your account again to keep it updated. I'd encourage you to perform this process every month to monitor your transactions accordingly. You can refer to this article for the detailed steps: Reconcile an account in QuickBooks Online.

 

Please don't hesitate to keep me posted if you have other concerns about recording bounced checks in QBO. You can drop a comment below, and I'll gladly help. Take care, and I wish you continued success, @CQCTAY.

CQCTAY
Level 1

Bounced Checks

Thank you @Rea_M. I really appreciate the help. Ill Try it out and see if it works. They didn't have bills associated with the checks. I do have a box of invoices. Would I have to match each one and make a bill for it then perform the steps listed in the article?  

MirriamM
Moderator

Bounced Checks

Hello again, CQCTAY.

 

As for your suggested workaround, it can work, but I suggest contacting an accountant before doing so. They can verify if it won't cause any issues when a tax audit comes. If you don't have an accountant, you can find one through this link: Find an accountant.

 

As always, feel free to visit our QuickBooks Community help website if you need tips and related articles in the future.

 

Please keep me posted if you have any other concerns about QuickBooks. I want to make sure everything is taken care of for you. You can reach out to the Community at any time. Take care and have a great day!

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