How does one delete a failed direct deposit payment to a contractor? They gave me a bad bank account number.

Thanks for posting in the Community, @sb-askwoody-com.

In QuickBooks Online (QBO), you can void the failed contractor direct deposit (DD) from the bank register instead of deleting it. This can be done by going to the Expenses menu.

Here's how to do it:

1. In QBO, go to the Expenses menu at the left pane to get to the Expenses page.
2. Locate the DD transaction to be voided.
3. Click the View/Edit drop-down arrow under the Action column.
4. Choose Void, then hit Yes to confirm.

Once done, it'll show as voided, and the amount will change to $0.00. Also, QBO has an option that allows you to find or update your DD funding time. Check out this article for more information: View or change your direct deposit funding time.

Reach out to me in the comment section below if you have any other questions or concerns. I'll be here to help. Have a good one!

I tried that.  It said "We couldn’t void the transaction. Please try again.

We couldn’t void the transaction. Please try again.

I attempted what you said and it still won't let me void it.

Hi sb-askwoody-com,

The Void option will not work for direct deposit payments to contractors. I would recommend contacting our Support team. That way, they can assist with your payment. They have a way to do this on their end.

We're just right here if you have more questions.

I contacted the support team and they told me to create a reversing "journal Entry" 

I'm having the same issue. was on a support call for over an hour today. Still no solution...

I've also encountered the same issue. Was on with support this morning for over an hour. They had me try voiding the expense, deleting the expense, etc. None of them worked and only displayed error messages.

Ultimately, they wanted me to do a reverse ledger, but my books are balanced, and although this expense and bill show up in all my reports, it isn't actually appearing in my actual ledgers. It just affects all my Contrator Bill Payments, etc... 

Any solution? This is super frustrating...

I understand how time-consuming it is when something isn't applicable the way you need it, @mrnorgren. Let me share some details about deleting a contractor's direct deposit in QuickBooks Online (QBO). 

The offload time for ACH processing of your Direct Deposit (DD) happens at exactly 5:00 p.m. Pacific time, two banking days before the scheduled pay date. If you're unable to complete voiding your direct deposit, you may have passed your processing deadline.

That said, I'd recommend contacting our Payroll Support Team again to help you cancel the transaction and to assist you further with the accounts.

Moreover, QBO has an option that allows you to find or update your DD funding time. You can visit this article for more detailed information: View or change your direct deposit funding time.

Please don't hesitate to leave a comment below if you require further assistance with direct deposits. The Community is always here to assist. Keep safe!

I’m having issues with the same thing here. I have four direct deposit transactions that failed for a vendor. I can’t delete, void or edit them because quickbooks tells me they’ve already been processed. Now the 1099 report for those vendors show double payments for each of those transactions, the failed ones and then the correct ones when they were resent. This throws the books off completely and over-reports their income.

Support was unable to delete these failed direct deposits from their end. It seems like there is no solution! Someone please help.  

I know this hasn't been an easy process for you, VIPNeedsUrgent.

Let me make it up to you by helping you keep your books accurate.

Since the direct deposit payments have been processed, you can no longer void, cancel, or delete the transaction. To fix this, you can create Journal entries to offset the contractor's direct deposit transactions amount.

Here's how:

1. Select + New.
2. Select Journal entry.
3. On the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
4. On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
5. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
6. Enter information in the memo section so you know why you made the journal entry.
7. Select Save and new or Save and close.

For more details about stopping a direct deposit, please see this article: Void or cancel contractor payments.

I appreciate your patience on this matter. Please know that we're always here to help you out.

@VIPNeedsUrgent Did you ever find a solution? I just discovered I have the same issue. 

The Journal Entry does not help with balancing out the payments when I run the contractor reports. It still shows I have paid double the amount that I actually paid. 

I appreciate you for trying the steps shared by my colleague, MLacassin.

I want to ensure that your books are free from any error.

I'd suggest reaching out to your accountant. They're the best one that can help record the failed direct deposit and they can guide you in choosing the correct accounts to debit-credit for the offset. If you don't have one, you can visit this page: Find a ProAdvisor.

I've added these links as your guide in managing direct deposits:

• View or change your direct deposit funding time
• Get help if you’re over a direct deposit limit

You can always mention my name if you have other concerns about managing employees.

You do need to make the mentioned revering journal entry to correct your expense and bank account. Unfortunately the reversal does not show up on the contractor payment list or the vendor transactions. It does however adjust the 1099 amount. If you run a 1099 Transaction Detail Report you will see it there. When you issue a 1099 to that vendor it should reflect the correct amount. Hope that helps.