Hello, KFowler1. To resolve this issue in QuickBooks Desktop (QBDT), you'll have to record the returned funds and reissue a manual check. This ensures that the original paycheck remains intact for tax reporting while your bank balance and liability accounts stay accurate.
Here's how to do it:
Since the direct deposit failed, the bank has returned the money to your account. You'll have to record this Deposit to offset the original paycheck and put the funds back into your ledger.
You can refer to these steps:
- Go to Banking and select Make Deposits.
- In the Deposit To field, select the bank account where the funds were returned.
- In the From Account column, select the Direct Deposit Liabilities account.
- Enter the Net Pay amount of the returned direct deposit.
- Click Save & Close.
Once the funds are back in your system, you can now create a manual check to pay the employee. Let's proceed by following these steps below:
- Go to Banking and select Write Checks.
- In the Payee field, select the employee's name. Please note that if a prompt asks if you want to create a Paycheck, select Write Regular Check. This avoids duplicating tax calculations.
- In the Expenses tab at the bottom, select the Direct Deposit Liabilities account in the Account column.
- Enter the Net Pay amount from the original paycheck.
- Add a memo such as Reissue for returned direct deposit, and include its original pay date.
- Click Save & Close or Print to issue the physical check.
You can also run a Transaction Detail report to verify that the Direct Deposit Liability account is cleared. From there, you should see the Deposit and the Manual Check offsetting each other perfectly.
Feel free to reply if you need any further assistance with your QuickBooks Desktop workflow. We're always here to help.
