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Level 2

Bounced check and matching transactions

We had a customer that we invoiced that paid us and the payment was recorded and matched via the banking feed.  A week later the check bounced.  We did not have any fees from the bank as I was able to call them and convince them to waive the fees.  I have seen some advice about creating a second invoice using the service "Bounced Check" rather than sales and then matching the second invoice to the second payment (we were paid on the bounced check), but when I did this it ended up showing as an accounts receivable on the balance sheet even though we were paid on it.  I also am not sure how to categorize the return on the bounced check on the banking feed.  Do I just put that as an expense to us?  The way I did it above I had 2 invoices - the original which we were paid on via the original check and the second invoice for the bounced checks which we were also paid on, but then it was still showing on the balance sheet.  Thanks in advance!

3 Comments 3
Level 9

Bounced check and matching transactions

QuickBooks Team

Bounced check and matching transactions

Hi there, @AllisonE.


Thanks for the detailed information about your concern. I'm here to provide some ways to properly record your bounced check.


First thing is, always remember to use the correct accounts for all the steps outlined below.


You can record a bounced check using an invoice, a check, or a journal entry since the check have been received from a customer for a transaction in which Accounts Receivable was used.


Here's how to enter the returned check using invoice:

  1. Create Service item for the bounced check.
  2. Once the Service items are created, you must create an invoice for the amount of the bounced check. 
  3. When you receive payment from your customer, you must record it and link it to the invoice you created.

For the detailed steps, look into the this article:


Addionally, to enter the returned check with Write Check, or Journal Entry, check out the following articles below:

That should help you record a bounced check. If you should need anything, I'm just a reply away. Have a most lovely holiday.

Level 1

Bounced check and matching transactions

Here is a simple means to solve  this problem.


1. Match payment to invoice from bank matching system

2. Add Expense for the bounced payment you see in matches, open expense and flag it as a BILLABLE EXPENSE to the customer

3. Open the original invoice, click the little arrow on right side of screen

4. Add Billable Expense to the original invoice

5. Add NSF line item to the original invoice

6. Original invoice now shows original items, day, times and payment made AND new items for bounced cheque and NSF fee

7. Save and Re-Send to customer


This process shows the real flow of monies and keeps the books and bank matches aligned correctly and is done in 2 minutes.

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