the link posted is instructions for Quickbooks Desktop... is there an option like this in Quickbooks Online?

Hello pipolhausen,

It’s nice to have you in the Community. I’m here to help record the returned payment in QuickBooks Online.

The link to the article given by @lyndaartesan refers to handling bounced checks from customers in QuickBooks Desktop. To record the same transaction in your QBO account, you can either write a check, or use a Journal entry.

Here are articles to keep you going:

• Enter a returned or bounced check using write check
• Enter a bounced check using a Journal Entry

Meanwhile, if you’re referring to recording a check returned by your vendor due to non-sufficient funds, you’ll have to create a journal entry and a bill payment check. Let’s go through these steps one-at-a-time:

Step 1: Enter a reversing journal entry.

1. Go to the Plus icon (Create button), then Journal Entry.
2. Make sure the Date, Entry No, and Vendor name are correct.
3. Debit the checking account for the amount of the NSF check.
4. Credit the A/P account for the amount of the NSF check.
5. Click Save & Close.

Step 2: Un-link the bill from the payment check and link it to the journal entry.

1. In the left panel, click Expenses, then Vendors.
2. Locate the vendor you need, and open the original bill payment.
3. From the Bill Payment screen, put a check mark in Journal Entry you’ve created.
4. Uncheck the Bill originally paid by the bill payment check.
5. Enter a Memo to indicate the check was returned for NSF. Then, select Save & Close.

Step 3: Create a new bill payment check to record the new payment transaction.

1. Go to the Plus icon (Create button), select Pay Bills.
2. Choose the bill originally paid by the NSF bill payment check.
3. Complete all other required information.
4. Click Save and Close.

That should do it! You should now be able to record the returned payment regardless if it is for your customer or from your vendor.

If you have other questions, feel free to leave me a message below. I’ll be on standby for your response.

This doesn't work for the online version. How can you do it for the online version? 

And for a church, which doesn't have an invoice or bill - it is just a receipt of funds - the whole invoice thing isn't going to work. 

I can share some additional information on how to handle returned payment in QuickBooks Online, ADescartes.

If creating a Journal entry isn't your option. Then, you can write a check instead.

Here's what you'll need to do:

1. Enter the returned check with Write Check.
2. Change the payment entry.
3. Create Service items for bounced checks and fees.
4. Create an invoice for the bounced check fee.
5. Enter the bank service charge.
6. Print and send the statement to your customer.
7. Record the new payment from your customer.

For more detailed steps about this process, you can check this article: How to enter a returned or bounced check using Write Check.

Additionally, I'm attaching a great resource that you may find helpful in the future:

Handle a rejected or failed bank transfer payment.

If you have any additional questions on how to record returned payment, please get back to me by clicking the Reply button.

How do you handle recording the insufficient fund's transactions when the customer has paid through QuickBooks ACH online the transaction has been returned for insufficient funds but the invoice shows paid in full.

How do you handle recording the insufficient fund's transactions when the customer has paid through QuickBooks ACH online.The transaction has been returned for insufficient funds but the invoice shows paid in full.

Thanks for joining this conversation, rlaa.

To record a returned payment, you'll have to create a new service item and use it to create an invoice. Then, attach the rejected payment. Lastly, mark the old transaction as unpaid and re-send it to your customer.

I'll show you how:

First, you'll need to determine if the payment deposit was recorded or not.

1. Select the Plus icon at the top and choose Bank Deposit.
2. Go to the area labeled QuickBooks Payments.
3. Look for the payment in the list. If it is there then it's undeposited. If not, the deposit was recorded to your bank account in QuickBooks.

Next, create a special service item. This will let you account for the rejected payment.

1. Select the Gear icon at the top and choose Products and Services from the pop-up window.
2. Click the New button, then choose Service.
3. Enter the following details:

   If the payment was deposited in QuickBooks

   • Name - Rejected bank transfer
   • Description - Bank transfer payment received but was rejected by the bank
   • Income account - Select the bank account where the payments were deposited to

   If the payment wasn't deposited in QuickBooks

   • Name - Rejected bank transfer
   • Description - Bank transfer payment received but was rejected by the bank
   • Income account - Undeposited funds
4. Leave everything else blank.
5. Hit Save and close.

Then, create a new invoice which you can send to your customer.

1. Go to the Plus sign icon and hit Invoice from the pop-up window.
2. Select the customer name in the first field.
3. Enter the Rejected bank transfer item you just created in the steps above. (Do not use the original product/service you used on the invoice).
4. Add the total amount of the invoice including tax if applicable. (Do not mark as taxable).
5. Select Save and close.

Step 4: Attach the rejected payment to the new invoice.

1. Open the original invoice for the customer.
2. Select the Payment link to open the rejected payment.
3. Uncheck the original invoice and select the new one.
4. Hit Save and close.

The account balance is now set and you can resend the original invoice to collect the payment.

Please visit this article for the complete steps in handling a returned payment: Handle a rejected or failed bank transfer payment.

Reach out to me if there is anything else I can help you with. I'll always be here to assist you. I look forward to hearing about your success.