clearing an uncashed check

Thanks for taking the time to reach out to us, Hawkeye14. I understand that uncleared transactions can pose some challenges during the reconciliation process.

Since you're unable to reach the payee, you'll want to consider voiding the check through a journal entry. Here's how:

1. Go to the Company menu and select Make General Journal Entries.
2. Select your bank in the Account column and enter the amount under the Debit section.
3. Choose the account you used to enter the refund and put in the amount in the Credit section. 

Alternatively, you can create a bank deposit to move the amount back to your bank. This approach will ensure that the funds are not lost and the transaction is cleared out during reconciliation. 

However, I would advise consulting your accountant before proceeding with these options as it may have implications on the previous reconciled period. 

Let me share these articles for additional details about these options: 

• Create A Journal Entry In QuickBooks Desktop For Windows Or Mac
• Record And Make Bank Deposits In QuickBooks Desktop

I also want to share these articles for additional guidance and reference when working in QuickBooks:

• Write Off Customer And Vendor Balances
• Fix Issues When You're Reconciling In QuickBooks Desktop

The Community is always here in case you have follow-up questions, Hawkeye14. We're open 24/7 to offer our when you need it. 

Thanks for your reply, jenop2.  I considered a GJE, but I am wondering whether it will mess up the original transaction, which in turn could mess with the refund and other things for the year 2022.  Additional details: 

Since she wanted to prepay, I created an Invoice for the repair (estimated to be $467.75), and then used the Receive Payments function to apply her debit card payment of $467.75, when she dropped off the vehicle.  During the repair, we realized we didn't need all the parts I had included on the estimate.  I corrected the paid Invoice to $291.54 to reflect the actual cost of the repair.  Her payment of $467.75 thus became an overpayment, which triggered QB to ask if I wanted to create a Credit Memo or Issue A Refund, in the amount of $176.21.  She did not want a Credit Memo, and requested that I give her a check instead of trying to figure out a way for her to get her debit card to us (she had no credit card, and we cannot process debit card with PIN transactions unless the card is present to be read by the terminal).  So in the Issue A Refund window, I entered a Refund in the form of a check from my checking account, and then wrote out check #6222 for $176.21 and put it with her paperwork inside the vehicle.  She collected the check but never took it to a bank for cash/deposit.

So now is QB holding that Refund in some kind of "clearing account" that lists checks that have not yet been processed by my bank, that I select from every month whenever I reconcile the checking account with my bank statement?  If I simply Void the check, then it will not show up during reconciliation any more, but QB will then think that I still owe her a refund.  If I "void" the Refund with a GJE as I think you suggest, will that leave Refund Check #6222 still recorded as the refund of her overpayment?  And if so, what is the name of the "clearing account" that it is being held in, and can I access it with a GJE?  I want to figure out a way to cancel the amount of the Refund (i.e., transfer it back into my checking account within QB) today (meaning dated now) without cancelling the check that QB recognizes as the refund for her overpayment.  I don't want to mess with a two year old transaction if I can avoid it.  Does that make any sense?

I've got your back, @Hawkeye14.

After you void the refund by creating a General Journal Entry (GJE), it will still be recorded as an overpayment refund on your customer's account. The refund won't be deleted; it will only be offset.

Also, the name of the clearing account that it's being held in depends on how you'll name it upon setting it up. Additionally, you can access all accounts when creating a GJE.

Moreover, the way to cancel the refund amount without canceling the refund check for the overpayment is by creating a GJE. For more guidance on the offsetting process, you can consult your accountant.

Just in case you want to display a more detailed breakdown of amounts and accounts that are not visible from the transaction, you can check out this article for guidance: View the Transaction Journal report in QuickBooks Desktop.

You can always get back to this thread if you have any follow-up concerns regarding creating a GJE for your customer. We'd be glad to help. Stay safe!

Hello jeanbiverly, thanks for your reply.  I printed a Transaction Journal report of that day's transactions in the Accounts Receivable register, and I found 3 transactions related to that repair.  One was the corrected Invoice for $291.54 (that had been adjusted to show the actual repair, rather than the estimated repair that I initially entered for the purpose of accepting her prepayment), and second was her payment $467.75, and third was the refund check #6222 for $176.21.  So far so good.  I entered a GJE with a debit $176.21 to PNC Checking (the QB name for my checking account) and a credit $176.21 to Accounts Receivable and attributed to her name, dated today.  Then, I opened Reconcile PNC Checking, and that check #6222 was still listed at the top of the list of payments waiting to be selected for reconciliation.  Sigh.  So I created a reversing GJE, and here I am.

We've mentioned a clearing account.  I've never set one up--I just presumed that QB already had one.  This may be an apples/oranges thing.  BTW, if it matters, I am set up for accrual accounting, not cash.  This is what I have been thinking happens whenever I write/enter a check:  I complete all the fields using Write Checks, and when I hit Save & Close, QB credits PNC Checking, debits A/R <name> (or A/P if a refund), attributes it to an expense account, and then adds the payment to a list of transactions waiting to be reconciled.  In my mind, I am calling that "list" or "register" or whatever it is, a "clearing account."  That list of transactions (plus any unreconciled deposits to that account) is what is displayed in Reconcile <account>.  There has to be either a list, or maybe an algorithm that pulls flagged unreconciled transactions, into Reconcile.  I need to locate that list so I can remove Check #6222 from it, or unflag it if that's the process used, so that QB no longer thinks it needs to be reconciled, without actually affecting the real balance of PNC Checking.

Now, if you are thinking of a "clearing account" as being something different, then maybe I need to set that up, move the Check into that account, and then do...something?

Thanks for checking back with us, @Hawkeye14. 

No worries, we can get check 6222 cleared. All you'll need to do is locate the check in the register of the account it's in. If you're having issues locating the check in the register, you can click on the filter button at the top of the list of transactions, key in the check number, and then hit Apply. I'm including a screenshot below for reference. 

Now that you've located the check, look under the check mark column. If you see the letter C or R, keep clicking until it's clear (nothing there). Then, hit Save. 

As for your other concerns, I recommend consulting with your accounting professional. Your accountant can review your account and provide the best solution based on your business needs. If you don't have an accountant, don't sweat it. You can find one here in our Resource Center. 

Please let me know if there is anything else I can assist you with. Take care and have a wonderful day ahead! 

Hello Tori B, thanks for your reply.  I opened the register for PNC Checking, and that column displays a checkmark, an asterisk, or nothing, for every transaction, in my Fred Flintstone version of QB.  Clicking on the box toggles among the three options.  I found that if it's blank, then that item shows up in Reconcile as a transaction that hasn't yet been cleared.  If it has a checkmark, then that item shows up in Reconcile as cleared, and QB also adjusts the reconciliation difference between debits and credits accordingly.  If it has an asterisk, the same thing appears to happen as with the checkmark.  I note in the PNC Checking register that all the prior cleared (i.e., Reconciled) transactions have a checkmark, but Check #6222 has a blank box.  So, if there's no transaction in the right pane to offset it, then my reconciliation balance will be off by the amount of that check, $176.21, if I "clear" it either in the register or in Reconcile. 

So, it appears that changing the "uncleared" status of an individual transaction from within the register does not remove it from the list of transactions to Reconcile, at least in this version.  However, this gives me an idea.   After working through all the other transactions that are on my bank statement during the Reconcile process, I can force it to reconcile with a $176.21 difference, and QB will enter a GJE to sweep $176.21 into the Reconciliation Discrepancies account, so that PNC Checking will balance with a zero difference between the columns.   As you probably can tell, I make an effort to keep the books clean, but if there's no other way to do this, and it's ok to force the Reconcile, then I can do it.

Hello Rainflurry.  Good idea, looking at it from the other direction.  I entered a deposit to PNC Checking, attributed to the Customer's account, assigned to Sales Income, dated to be within the Reconcile period I'm currently working on (so it would be with that group of cleared items in the Register), and the results appear to be clean.  No numbers changed regarding the original transaction from 2022, the amount is captured as income, and I have matching transactions to clear in Reconcile with no apparent adjusting of other accounts.  I printed a copy of the deposit to add to the paperwork from the original transaction so I can trace it back if necessary.  Thank you, and the other responders, for your help!

In most states, that money needs to be sent to the State Treasurer's office as unclaimed money; after all, it's not your money, it's the client's money. To comply with state and federal laws, companies will send unclaimed money to the State for as little as $0.01 because they don't want to get embroiled with an expensive claim and lawsuit with customers. 

@Rainflurry 

You are so good at solving our QB issues, thank you! I have a similar situation......a customer overpaid his HOA so it was posted as a credit to his account. I then issued a refund check to him but it was never received or cashed. I would like to put it back as credit to his HOA account as use it against his next invoice. Do i just void the check?

How does this affect the prior years financials? The year the check was issued.

@Comprise 

Dating the deposit in 2024 has no effect on prior year's financials.  That's why it's necessary to use a separate deposit transaction (instead of deleting or voiding) to reverse an uncleared check from a prior period.      

@Linda48328 

I'm sure you have probably figured this out by now but if the refund check was posted to A/R then, yes, you can just void the check.  This assumes the HOA hasn't closed their books for the period in which the check was issued. 

The end of the story:

Rainflurry's suggestion cleanly removed the check without affecting 2022 data.  Ironically, I had placed her file in a folder to report as Unclaimed Funds later this year, but she came in about a month ago with a different vehicle that needed repair.  As I was preparing her Invoice after this repair, I created a Credit Memo in the amount of the lost check (attributed to Parts since that amount was for a part that we ended up not using but that she prepaid for), and offered to apply it to the current Invoice.  She was completely unaware, and pleasantly surprised, and said that she lost that 2022 paperwork and didn't even remember seeing a check.  So, problems solved all around.  Thanks again to all who chimed in.

I have read the thread and I'm still confused how to do this. In the bank Deposit Screen, at the top is "Deposit To".  Would that be the bank that I wrote the check out of (ex:chase) or an income account you mentioned such as "sales income"? 

Below that is "Received from": ?? and "From Account":?? The explanation here isn't specifying what is going in each location. Is the Customer going in Received From?  Is Sales Income going in "From account"? 

The old refund check is still showing up to reconcile in the bank account and I want to clear it out of there.

The Customer's open balance report is showing the overpayment amount (negative) on one line and the refund check amount (positive) on a 2nd line, making them at zero as it should.  I do not want to void the check and reflect that we still owe it to the customer since it was errors on the customers part at the time 2 years ago and been resolved with them but these transactions are still here. 

Please include the details to fix.  Thank you.