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lizzen
Level 1

Customer payment deposited AND withdrawn (NSF) and matching bank transactions

Hi, I've looked up and down all of the entries for bounced checks but cannot seem to reconcile what's happening on my end with the answer. If someone could please help put this issue to rest!

 

We have a customer paying us through quickbooks. They sent us payment, QBO recorded it as a payment (and created a payment transaction on the client page, marking that invoice paid. In banking, deposit for amount X shows up in "for review". Before we are able to match that transaction to the payment, customer's bank (or whichever side, not sure that it matters) determines payment should be pulled back, and our bank account is debited for amount X. In banking, "for review" now shows a withdrawal for that amount. Cash purposes, net 0 effect. Invoicing all screwed up as that original invoice is no longer paid. 

 

Per help articles, my understanding is that I create an NSF check, using A/R as the account, and amend that system-generated payment to this check, instead of the original invoice. But what does that do to my two transactions sitting in "for review" - how/where/to what do I match those? I need to make sure they net to $0 as far as cash/income is concerned, b/c then the customer writes us a paper check and deposit of that check is the payment I want to apply to the original invoice. Please help!

3 Comments 3
Adrian_A
Moderator

Customer payment deposited AND withdrawn (NSF) and matching bank transactions

You have me to help you sort this out, lizzen.

 

Yes, you're correct in creating a check using Accounts Receivable as the affected account. We'll need to unlink the invoice payment so we can link the invoice and the check. Let me guide you with these steps:

 

  1. From the Sales tab, select Customers.
  2. Select the customer's name.
  3. Locate and click the payment.
  4. Deselect the invoice.
  5. Tick the check.
  6. Click Save and close.
  7. Select Yes.

 

 

Afterward, open the invoice and receive the payment again.

 

I've also added this article for the different ways to enter a bounced check: How to record a bounced check entered using Accounts Receivable.

 

I'm just around the clock if you still need my help!

lizzen
Level 1

Customer payment deposited AND withdrawn (NSF) and matching bank transactions

Hi, so when I do this, the original payment (processed as a Quickbooks payment) turns into an "unapplied payment", basically a credit, on the account. How do I make that right, particularly in the bank feed, as I need to account now for 2 deposits into the bank (and therefore 2 bank feed transactions), one of which was the amount withdrawn due to the NSF?

YvetteVelarde
Moderator

Customer payment deposited AND withdrawn (NSF) and matching bank transactions

@lizzen I can help guide you in the right direction. I have a link with steps to follow to record an NSF payment correctly in QuickBooks. 

 

Record a bounced check using an invoice

 

Let us know if you have additional questions.

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