How to handle bounced check to vendor

This worked.

thanks so much !!

I'm having this issue as well, except not with a cheque we wrote.  A supplier tried to take their EFT payment from our bank account.  The funds were not there.  So now I need to match up the original attempt to take the funds as well as the transaction reversing the EFT and the transaction for the NSF charges.   

I'll be more than happy to assist you in recording these transactions in QuickBooks Online (QBO), @DebGer.

If your bank covers the fee for payment that was taken by your supplier, you'll only need to record the NSF charge that was processed. To do this:

1. Click the + New icon and select Expense.
2. From the Payee ▼ drop-down menu.
3. From the Payment account ▼ drop-down list, select the account you use to pay expenses.
4. To distinguish it from other expenses, enter “NSF fee” in the Ref no. field.
5. Under the Category column, select Bank Charges.
6. Enter the amount you were charged for and select Save.

After this, you can now record the bill payment using Pay bills. 

Once the bank fee and the bill payment shows up on the Banking page, you can now categorize and match them to these records. 

If you need any additional assistance while managing your bank transactions, you can leave a comment below. I'll be sure to get back to you.

I found this really clear, and helpful, but I have a follow up question! My bank returned one of our EFT transactions due to insufficient funds, and we've now re-run that payment. I have three transactions in my feed for the same amount: the original debit, the return because of the bounce, and the secondary debit. How do I record that return transaction?

Hi there, HannahBuild.

Thanks for joining us here!

You'll want to create a journal entry to reverse the bounced check payment. Then, let's reopen the bill and link the bounced check to the journal entry.

Please follow these steps:

1. Go to the + New button and select Journal Entry.
2. Enter the date the check bounced in the Journal Date field.
3. On the first line, select the bank account in the Account column. Enter the check amount in the Debits column.
4. Select Accounts Payable on the second line and the vendor from the Name column.
5. Click Save.

Then, proceed to these steps:

1. From the Expenses menu, select Vendors.
2. Find and select the vendor’s name. In the Transaction List, find and select the bounced check.
3. Uncheck the checkbox for the bill, then select the one for the journal entry.
4. Confirm you want to make the changes, then select Save.

I added these links for more details on how to handle downloaded transactions:

• Categorize and match online bank transactions in QuickBooks Online
• Reconcile an account in QuickBooks Online

Post again here if you need anything else. Stay safe!