how to deal with a check mess up from customer in QBO

When dealing with a bounced check from a customer, it's crucial to address the situation promptly. I'll be here to guide you through the process of recording this and categorizing transactions to maintain accurate financial records. 

First, record the bounced check  using a journal entry. Consider consulting an accountant to guide you through the process. Here's how:

Step 1: Create a Journal Entry (JE). 

1. Click + New.
2. Under Other, select Journal Entry.
   
   
   
   
3. In the Journal Date field, enter the date wherein the check bounced.
4. On the first line, select Accounts Receivable from the Account menu.
5. In the Debits column, enter the amount of the bounced check.
6. Pick the customer from the menu in the Name column.
7. On the second line, select the bank account from the Account menu.
8. The amount should appear automatically in the Credits field.
9. In the Memo field, enter the reason for the journal entry. Then, hit Save. 
   
   

Step 2: Unlink the bounced check from the original invoice, and link it to the Journal Entry.

1. Click Sales and choose Customers.
2. Tap the name of the customer who issued the bounced check.
3. Find and pick the bounced check.
4. Clear the checkbox of the invoice the check was originally applied to, and select Journal Entry.
5. Hit Save.

The bounced check is now linked to the JE.

Step 3: Create a bank deposit affecting Accounts Receivable (AR).

1. Go to +New and choose Bank Deposit.
2. Pick AR from the Account dropdown.
3. Select the transaction.
4. Make sure the total amount of the transaction matches your deposit slip.
5. Hit Save and Close.

Finally, you'll be able to link it to the original invoice. 

By following these detailed steps and best practices, you can effectively manage bounced checks from customers and ensure accurate categorization of transactions in QBO. This approach not only helps in maintaining financial clarity but also supports informed decision-making for your business. I'll be more than happy to address queries you may have about handling checks, invoices, and payments. Just add a comment below. Providing you with clear, straightforward guidance is my priority, Ametz1201.

I am confused.  Just because the bad check was deposited with other checks that day, so confused on how to go about matching that deposit.  When I deposited the replacement check from the customer, I deposited it separate so that is on the only check that was in that deposit.  TIA

I can see that you need clarification with matching/categorizing the deposit that included the bad check, ametz1201.

First off, you'll want to separate the deposit that contained the bad check from the deposit with the replacement check. Since the bad check was deposited along with other valid checks, it will be difficult to match that specific original deposit to the replacement check you later received. The best way to handle this is to record the deposit that included the bad check separately from the deposit you made for the replacement check.

Then, when the bad check is returned, you'll want to record that as a Bounced Check in QBO. You can do this by:

1. Going to the original deposit that contained the bad check.
2. Click the Undo Deposit.
3. This will remove the bad check amount from the deposit.
4. Then, record the bad check as a Bounced Check transaction.

This will reverse the payment received on the customer's invoice. Then, you can deposit the replacement check separately and record that deposit as a normal deposit in QBO. Make sure to apply this deposit to the corresponding invoice or sale.

Alternatively, you can record a customer's bounced check using a journal entry. You can follow this article for the detailed guide: Record a returned or bounced customer check using a journal entry. However, if you're unsure about how to handle bounce check using journal entry, I recommend consulting with an accountant to guide you through the process. If you don't have an accountant, we can help you find one. Feel free to visit this page to find an accountant for your business: Find a QuickBooks ProAdvisor.

Lastly, after recording the bad check as a bounced check and the replacement check deposit, be sure to reconcile your bank account in QBO. This will help ensure everything is properly accounted for. 

Moreover, QuickBooks Online provides different kinds of reports so you can get the information you need for your business. Here's an article that you can read for your reference: Run Reports in QuickBooks Online.

Let me know if you have any other questions on properly categorizing and matching it. Just post a comment below. Have a great day. 

Also what do I do with the transactions from the bank that is debiting the amount of the check that are in the for review?  And the bank messed with taking the money back out for the messed up check, so instead of just one transaction showing a negative amount taking the amount of the check that was wrong, I guess they did a typo or couldn't read the check and took out 3 cents too much and they did a debit transaction for the 3 cents.   So there are 2 transactions form the back for the bad check in the for review section.

I'm here to walk you through the steps to get your books back in order, ametz1201.

You can't directly match the two transactions and the bad checks since they have different amounts and are incorrectly posted and issued by the bank. Instead, you'll exclude those two messed transactions in the For Review section. Then, manually clear the existing entries in the register.

To exclude them:

1. Go to the Transactions menu, then select Bank Transactions (Take me there).
2. Click the transactions in question.
3. Hit the Exclude options at the bottom.

To manually clear an entry:

1. Click the Gear icon, then select Chart of Accounts.
2. Choose the account you're working on, then select View Register in the Action column.
3. Locate and select the transactions.
4. In the ✔ column, keep clicking the blank status until it shows cleared (C).
5. Hit on Save.
6. Tap Yes to confirm.

Please wait for the payment to be posted to your bank feeds before you can match it to the replacement check.

Here are some articles you can refer to managing bank transactions moving forward:

• Categorize online bank transactions in QuickBooks Online
• Set up bank rules to categorize online banking transactions in QuickBooks Online

I'll promptly follow up if you require further clarification. The Community is accessible round the clock for any assistance you need with banking-related inquiries.

Ok, I recorded the bad check as a journal entry.  And did the steps to clear the original invoice and link the bounced check to the journal entry and received the new payment to the customer invoice.  Next question is, with do I do with the debit transactions in the for review from the bank for the bad check?  I see when I go to match it the journal entry is in there open to match.  Is the journal entry supposed to match the transaction from the bank debiting the bad check from me? If so, my next question is, my bank debit the wrong amount of the bad check.  The check amount is for $5,999.96.  But the bank debited me $5,999.99 and credited me $0.03 since them took too much out.  So, if I'm supposed to be matched with the open journal entry to the debit bank transaction, what do I do with the two transactions from the bank since they messed it up? TYIA

There's no need to match the journal entry to the debit transaction, ametz1201. I'm here to clarify this matter so you can track bad checks accordingly.

Since the bank transactions and the journal entry to account for the bad check have different amounts, you cannot match them. You can instead exclude the debit transaction and manually clear the journal entry from your register. For the detailed process, please refer to the steps provided by my colleague above.

Moreover, consider generating and customizing financial reports to gain more knowledge about different aspects of your business. You may also memorize the data to save their current customization settings, which can be sent on a recurring schedule via email.

It's always our priority to help if you require additional assistance managing bad checks in QuickBooks Online. Just leave a reply on this thread to update us in the Community forum.

Ok, but if I exclude the left over two transactions in the for review,  will I be able to have them to reconcile my statement for the month because the -$5,999.99 and the $0.03 from the bank for the bad check are both on my bank statement.

I appreciate you getting back to the thread and providing an update on your concerns, @ametz1201.

Let me chime in and provide insights about dealing with the leftover transactions in the for review section in QuickBooks Online (QBO).

Yes, you'll be able to reconcile your statement for the month. My colleague advised you to exclude your two transactions and manually clear the Journal Entry (JE) in your bank register because QuickBooks won't allow you to match the two entries or transactions from your bank to the JE created for the bad check. However, I recommend that you consult your accountant to verify and review your QuickBooks records. This will ensure accurate information on whether to delete or exclude the leftover transactions, as both transactions appear in your bank statements. Your accountant can also review if any transactions need to be added or deleted from your records.

I'll also provide these articles for future reference when reviewing your beginning balance and addressing issues for accounts that haven't been reconcile before:

• Fix issues the first time you reconcile an account.
• Fix issues for accounts you've reconciled in the past.

Please keep me informed, @ametz1201. If you have any other questions about leftover transactions or anything else related to QuickBooks. I'll assist you in any way possible.

I am so confused, first I am told to exclude the transactions from the bank.  But when I ask about will I be able to reconcile them when I do my bank statement because those 2 transactions are on my bank statement now I don't get an answer for my question, only tell me to talk to my accountant.  Thanks.

Let me shed some light on managing bad checks in QuickBooks Online (QBO), @ametz1201. After this, you can start managing your other bank entries to reconcile.

QuickBooks won't allow you to match these two entries from your bank to the Journal Entry (JE) created for the bad or bounced check, which explains why you are advised to exclude them from the For Review section and manually clear the JE in your bank register. 

Although these are on your bank statement, please take note that the statement is only used as a reference when reconciling an account. We can still mark check the $5999.96 and $0.03 on the reconciliation page and add notes to the JE about the deposit error made by your bank. 

Let's add the notes first before we go deeper into this matter. We can start by following the steps below:

1. Go to the Sales menu and hover to the Customers tab.
2. Locate the customer to whom this JE is intended.
3. Select the JE created and click View/Edit under the Action column.
4. In the transaction window, scroll down to the Memo section and add notes that will help you determine that the transaction is a match to two deposits for the bad check.
5. Once done, click the Save button.

Concerning reconciling your bank without these two transactions, you can proceed with the reconciliation as we have already created the JE to keep your account balance. Just ensure to mark it clear in your bank register so QuickBooks will recognize this entry as cleared.

After this, you can now start reconciling your account to avoid discrepancies in your books: Reconcile an account in QuickBooks Online.

The Community is always available to help you record your transactions and other financial movements in the business. You can hit the Reply button to start posting them here. Take care!