Bounced check showing up as a credit on customers account

Hi there, OPM96.

It's good to have you here in the Community. It'll be my pleasure to help you correct this bounced check issue.

Generally, bounced checks aren't supposed to show up as a credit on your customer's account. This is because QuickBooks will create a journal entry which credits your bank account and debits the Accounts Receivable (A/R) account. After this, the payment is removed from the invoice, which will be reopened.

However, since it is showing as a credit, we can go ahead and delete it to correct the wrong amount. Just a heads up, make sure that you've recorded the payment your client has taken care of before doing the steps below.

To delete the bounced check:

1. From the Customers menu, choose Customer Center.
2. Select the customer's name.
3. Go to the Transactions tab.
4. Click the Show drop-down menu located on top of the Type column, then select Received Payments.
5. Double click the payment that you recorded as a bounced check.
6. From the Edit menu, select Delete Payment.
7. Hit Yes.

To delete the General Journal Entry:

1. From the Customers menu, choose Customer Center.
2. Select the customer's name.
3. Go to the Transactions tab.
4. From the Show drop-down menu, choose All Transactions.
5. Double click the General Journal.
6. From the Edit menu, select Delete General Journal.
7. Click Yes.

As mentioned, this transaction shouldn't show up as credit, so I'm going to include our guide on how to record bounced checks if you want to record it again.

Let me know here if there's anything else I can do to help you with. Thanks for dropping in, wishing you and your business continued success.

My solution was to apply the original bounced check to the journal entry. I am not sure why this is not done automatically by the bounced check button. Unless I am missing something, this seems to work for me. I hesitate to delete the original check and journal entry because I would lose audit trail.

Thanks for joining this thread, @Sambeaux.

Let me share an additional information about the bounced check issue in your QuickBooks Desktop. 

My colleague @AldrinS provided the exact information. To correct the recording transactions and to ensure that your books are accurate, you'll need to delete the bounced checked and the journal entry that was recorded incorrectly by following the steps provided above. 

There's no need for you to worry since all the changes will reflect on your Audit Trail report to ensure that you still have the copy from the originally recorded transactions.

Here's how you can pull up the Audit Trail report:

1. At the top menu bar, select Reports.
2. Go to Accountant & Taxes.
3. Select Audit Trail.

You can also check this article for the detailed steps on how to Customize reports in QuickBooks Desktop. 

To learn more on how to record bounced or NSF checks from customer, you can visit this article: Handle Non-Sufficient Funds (NSF) or bounced check from customers. 

Please know that you're always welcome to post if you have any other concerns about handing bounced check. The Community will always here to help. Wishing you and your business continued success. 

I assume I clicked on a wrong button somewhere while trying to record my first bounced check. What I found as a solution after visiting with my accountant, there was what seemed like a hidden credit memo for the customer in question. Go to the Customer Center, highlight the customer in question, you'll then see left arrow in upper right hand side of the current pane. Clicking on the arrow will reveal details about your customer. In the list was a credit memo for the amount of credit that kept showing up after bouncing the check. After deleting credit memo then undoing all my previous attempts to clear the memo, redoing the bounced check process in the 2018 version worked flawlessly.

The reason that this creates a credit memo is a little confusing but it results from the journal entry that is created as a result of recording the bounced check and the removing payment from the original invoice(s) that were meant to be paid. To resolve this credit memo issue, go into the customer center and find the payment that bounced (had NSF) and drill into it. Since you recorded a bounced check, this payment against the invoice(s) in question was removed in order for QB to re-open the invoices for payment. Now that you are in the original payment, you will see in the list of open invoices the GJ entry that QB made to record the bounced check. All you need to do is tp put a check next to that journal entry, just like you would when recording a payment next to an invoice, and this will remove the credit from your customer's account. When you now go to record a customer payment to this account, the credit will be gone.

Will this change my already reconciled bank statement if I check off the journal entry?

Let me share some information about journal entries, @HHC-CHB.

Yes, this will change the bank reconciliation if you checked off the journal entry in a reconciled bank account.

To learn more about what to do if your accounts in QuickBooks Desktop don't match your bank statements, you can refer to this article for the detailed steps: Fix issues when you're reconciling in QuickBooks Desktop. It also provides information about the causes of reconciliation issues.

Feel free to hit the Reply button if you have any other questions about removing entries from a reconciled bank account. I'm always around to help. Enjoy your day ahead!

I can't delete it since it was a merchant payment. QBO won't allow it. And since both payments came through merchant payments (Both Intuit) neither will allow me the ability to delete. So I am stuck carrying the credit and correcting every time there is a new invoice. 

Thank you for posting here in the Community, @muenstermann.

To help you in removing this merchant payment that causes you trouble every time you received a new invoice, I suggest reaching out to our Customer Support team.

They can get into your account in a secure environment, find an alternative on how to remove this merchant payment in a safe and secure environment.

You can reach our Customer Support for QuickBooks Online (QBO) by going to the Help icon at the top right of the account. Follow the steps below: 

1. Go to the Help icon to connect to a live support agent. 
2. Click on the Contact Us button and provide some details about this concern.
3. Provide us some information about your concern in the What can we help you with? box and click on Continue.
4. You'll now be provided options on how to connect to our Customer Support.

Check this article for more information about the different types of support we offer and their availability: QuickBooks Online Support.

The following article will guide you on how to generate and print your single journal entry and multiple journal entries on one report: Print a journal entry report. 

You can always get back to me if you have questions about your transactions or other concerns by leaving a comment below. I'm always here to assist. Have a great rest of the day.

That is not the point. If a merchant payment comes in through Intuit on the exact account that it is refused a couple of days later, QBO should have the software written in it to subtract that amount from that exact account. To require the need for a journal entry is fussing with the books in a unordinary practice whereas the account was corrected in the return. At that point the owner of the business would be able to process the NSF notice with that specific account without making any changes outside of a memo or a checkbox to flag that it was a refused payment due to NSF. I can easily write journal entries. But it does not solve a very easy software correction. It only muddies up the books.

Awesome information.  The little step of selecting ( using the check mark) next to the GL entry created from the "bounced check"  that was recorded, is ALL that is needed to get rid of the extra payment credit that appears after the bounced check is created. Thank you for sharing this little secret.

Sambeaux  How did you apply the bounced check to the journal entry?