Replace a rejected direct deposit with a manual check due to incorrect account number

Hi there, tmarie2.

Welcome to the QuickBooks Community. Let me discuss the difference between employees and vendors and how it works in QuickBooks. Then, make sure you'll be able to verify to whom you should give when creating a regular check that you've shared.

An employee is someone that another person or company hires to perform a service or a person that works for you. While vendors are people or companies to that you owe money as they have made the products or offered services for you.

The steps you've mentioned about creating a regular check are for employees. Those are the instructions on how you can pay the employee if they didn't receive a direct deposit on time that was created in QuickBooks Desktop Payroll.

On the other hand, if you want to manage a direct deposit with a vendor to fix a contractor payment, you can void paper or direct deposit payments. Please follow the steps below.

1. Select the Vendor menu and choose Vendor Center.
2. From the Vendors tab, select the vendor name.
3. From the Transactions tab, double-click the check you want to void.
4. Right-click the check image and select Void. After your void the paycheck, a notation is included in the Memo field, and the net amount of the check is 0.00.

To see further details, you can open this article: Void or cancel contractor payments.

Lastly, you may refer to this article to see various details on how you can resolve any issues with direct deposit in QuickBooks: Fix direct deposit issues.

Please don't hesitate to click the Reply button below if you have any related concerns with direct deposit. I'm always here to help, tmarie2. Have a great day!

So I would then print the check, have it signed and give to the employee. However what would be the next step? I'd guess that I would create a journal entry to debit the checking account and credit direct deposit liabilities, when we receive the direct deposit reversal?

Hello there, April.

In QuickBooks Desktop, a Journal Entry is only applicable to your contractors or vendors and not to the employee's paycheck. Since you have mentioned Direct Deposit Reversal, have you already submitted a Direct Deposit Reversal form?

If so, you can follow this article about the steps and information about what to do next: Reverse a direct deposit in QuickBooks Payroll.

You can void the paycheck once you get your money back from a Direct Deposit Reversal.

Did you face any issues while setting up a Direct Deposit for your employee? We would be glad to assist you in resolving this problem if you provide more details. Your feedback is valuable to us, and we will use it to improve our services.

Furthermore, you can learn how to enter historical tax payments in QuickBooks Desktop Payroll. QuickBooks Desktop uses this information to accurately determine your outstanding tax balance and ensure future tax deposits and filings are correct.

Please feel free to reply below with further questions about Direct Deposit Reversal. I'm always here to assist you.

It was a reversal due to account closing/incorrect number. So Intuit sent me an email notifying me that they will be reversing the direct deposit. That's when I found this article instructing me to write a manual check to the employee. I was just trying to figure out the next step when I get the refund from Intuit. Also, I will need to know if it's ok to void the paycheck so it doesn't appear that he was paid twice however I do not want the paycheck details deleted. Please advise.

I appreciate the detailed information, Aprilea13.

Since you want to void a paycheck in QuickBooks Desktop, you may do so if you have sent payroll to QuickBooks. Please know that this changes your paycheck dollar amount to zero. You may also need to make adjustments to balance your books. 

Here's how to void your paychecks: 

Step 1: Void Paychecks

1. Go to the Employees menu and click Edit/Void Paychecks. 
2. Change the Show paychecks through/from dates to the date of the paychecks.
3. Press the Tab on your keyboard or just click the paycheck that you want to void.
4. Hit the Void option. 
5. Select the checkbox to agree to the terms and conditions.
6. Repeat steps 1- 5 as necessary to include all checks that need to be voided.

Step 2: Send the voided paychecks

1. Go to the Employees menu and click the Send Payroll Data option. 
2. Click Send. 
3. Enter your payroll PIN, then select OK.

To learn more about when and how to fix an employee paycheck, you can access this material: Edit, delete, or void employee paychecks. 

Furthermore, you can use this guide to learn how to add deductions your employee needs to pay each payday: Set up, change, or delete employee-paid payroll deductions. 

If you need further assistance, please reply and enter your concern. The Community is here to help you.

You still haven't answered the question.  I have the same scenario and the payroll was to be direct deposited 10 days ago and the money has yet to be sent back to my bank.  Just wondering how long this process takes, as we need to get this employee paid. 

I understand the importance of knowing how long this process would take effect in your bank, Kristyanity. Let me share some information regarding this. 

Before anything else, it's best to ensure that your request for reversal was successful or rejected by checking it within your email notifications. Please know that it may take up to 9 banking days to get the result. 

If your request to reverse a direct deposit is approved, you will receive an email once the request is accepted. After the date that it's been accepted, the refund starts to be processed within 5 banking days. Please be advised that it could take up to 14 banking days from the deposit date of the paycheck to be reversed. 

On the other hand, if it indicates that it's not successful, you may work with the employee or contractor directly to get the money back. 

You can also check this article for further details about direct deposit: Reverse a direct deposit in QuickBooks Payroll. 

Moreover, I added an article you can use in case you'd like to fix or make changes to a paycheck: Edit, delete, or void employee paychecks. 

If you have concerns aside from reversal direct deposit, you can always leave them in the comment section or post them here in the Community. 

We had a payroll direct deposit returned to us due to an account being closed. The direct deposit was returned to our bank and now I am wondering how I give the paycheck to the employee since the original states cleared. Do I reissue a manual check for the amount owed to the employee and use the direct deposit liability account since the taxes are already ran through with the original/initial paycheck that was issued? Not sure how to address the fact of reissuing the paycheck correctly.

Thanks for getting back with the Community, MichelleMM1.

There's a few ways you can pay an employee who's direct deposit was rejected by their bank. Once method is to create a regular check.

Here's how:
 

1. In your top menu bar, go to Banking, then Write Checks.
2. Enter the date of your original paycheck.
3. From the Pay to the Order of ▼ dropdown list, choose which employee you want to issue a check with.
4. Use your $ field to enter the net amount of their direct deposit paycheck.
5. On your Expenses tab, click Direct Deposit Liabilities in the Account column.
6. Hit Cancel if prompted to pay liabilities.
7. Press Save.
8. Select Print.

Your other options are to change your direct deposit paycheck to a manual paycheck, or resend the employee's check through direct deposit.

You can find detailed information about each solution in our Handle a direct deposit paycheck that was not received by an employee article.

Please feel welcome to send a reply if there's any additional questions. Have a lovely Thursday!

Curious..Did you ever get a straight answer or figure it out on your own? I know from experience and see they are just giving blanket responses from Q.B. that is not exactly that helpful.    I just had this same thing happen to me and the q.b. rep on the phone had me void and run a payroll. She then told me dont worry there is a pop up that says we will charge your account $100, but really we wont.    HA. Ya know what yes they did.    Anyways curious if you ever found a concrete resolution to your issue? 

My employee & I ended up contacting her bank & they were able to help us out!

Good Luck!!

My employee & I ended up contacting her bank & they were able to help us out!

Good Luck!!