Showing results for 
Search instead for 
Did you mean: 
Level 1

How to book a Federal Reserve Return Item

Received a payment for $825.00 and matched off the invoices connected to it at the end of December. There was a stop payment on this and the money was taken out of our bank account as a Federal Reserve Return Item. We also received their payment through ACH that's why a stop payment was issued on the check (they didn't want to pay us twice). The $825.00 coming out of our bank account labeled as Federal Reserve Return Item happened at the beginning of January. December has been reconciled already. How should I book the $825 coming out of the account in January?

1 Comment 1
QuickBooks Team

How to book a Federal Reserve Return Item

Thanks for sharing the details with us, @JSTS


Let's create an expense under Accounts Receivable A/R, then link it to the invoice payment. Doing so will open the invoice as unpaid. Let me guide you how.


In your QuickBooks Online (QBO) account:

  1. Go to the (+) Plus icon.
  2. Select Expense.
  3. Under the Payee drop-down menu, select the name of the customer.
  4. Choose an account where the payments will be taken under the Payment account drop-down menu.
  5. Select Accounts Receivable (A/R) under the CATEGORY column.
  6. Enter $825.00 in the AMOUNT column. 1.PNG
  7. Click Save and Close.


  1. Go to the Sales menu and select the Customers tab.
  2. Locate and open the invoice payment.
  3. Mark the Expense transaction to link the expense to the payment.
  4. Click Clear Payment2.PNG
  5. Then hit Save and new.
  6. Click Yes to confirm the changes.

Once done, you'll be able to link the deposited payment to an open invoice. I'd also suggest getting in touch with your accountant if you want more tips on how to better record this.


Also, I'm adding this great article that can guide you on how to reconcile your accounts in QBO: Reconcile an account in QuickBooks Online.


Should you have other concerns in the future, you're always welcome to post here anytime. I'd be happy working with you. Have a great day!

Need to get in touch?

Contact us
Sign in for the best experience
Ask questions, get answers, and join our large community of QuickBooks users.
Sign In / Sign Up