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Manage a bounced cheque you wrote
How do you handle a check returned by your vendor due to non-sufficient funds? Learn how to record a bounced check transaction in QuickBooks by creating a journal entry and a bill payment check.
IMPORTANT: Do not void the original Bill Payment Check because it may be in a previous accounting period.
Step 1: Enter a reversing journal entry
From the Company menu, select Make General Journal Entries.
Make sure the Date and Entry No. are correct.
Debit the checking account for the amount of the NSF check.
Credit the A/P account for the amount of the NSF check.
Enter the Vendor name.
(Optional) Enter memos and classes.
Select Save & Close.
Step 2: Un-link the bill from the payment check and link it to the journal entry
Open the original bill payment check.
Uncheck the bill(s) originally paid by the bill payment check.
Check the Journal Entry created in Step 1.
Enter a Memo to indicate the check was returned for NSF.
Select Save & Close.
Step 3: Enter a bill for the overdraft charges
Do this step ONLY if the vendor charges you for the overdraft fee.
From the Vendors menu, select Enter Bills.
Enter the Vendor name.
On either the Expenses tab or the Item tab, enter the overdraft charges with the appropriate account or item.
Enter a Memo to indicate that these are charges for an NSF bill payment check.
Select Save & Close.
Step 4: Create a new bill payment check
Since you un-link the original bill payment check from the bill(s), they were marked unpaid and should re-appear in the Pay Bills window.
From the Vendors menu, select Pay Bills.
Select the bill(s) originally paid by the NSF bill payment check and the bill for overdraft charge (if applicable).
Complete all other required information.
Select Pay Selected Bills.
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