How to record donor checks returned for NSF?

Hello BFriends!

Thanks for reaching out to us. Let me assist you in tracking the bounced check from your donor.

I understand that there's no invoice created for this payment. However, for us to successfully record this, you'll want to create one so we can use the Record Bounced Check feature which is the easiest way. Simply go to the Customers menu and select Create Invoices. Enter the details needed, like the donor and amount, then tap Save & Close.

Once done, follow these steps:

1. Go back to the Customers menu and select Receive Payments.
2. Select the donor, Check as the payment method, and the invoice you created.
3. Click Save & Close.

From the Customers menu, click Customer Center, then select the donor's name. From the Transactions tab, choose Received Payments from the Show drop-down. From there, double-click the payment you just recorded. Then, follow these steps:

1. On the Customer Payment window, click the Record Bounced Check button.
2. On the pop-up, enter the bank fee, date, and the expense account for the bank charges.
3. Click Next, then Finish.

If the Record Bounced Check button is greyed-out or you received a message when clicking it, you can fix it by recording a bank deposit. Then, open the payment again and attempt to record the bounced check again.

You'll want to check this link: Reconcile an account in QuickBooks Desktop. This will explain the steps if you need help in balancing your books.

Comment below if you have additional concerns. I'll be here!

Thank you for your response! I went through the process, but I have one more question. I had originally recorded the donation check that bounced through the donation link on the "Home" page and deposited it with a bunch of other checks and donations that day. It is still showing up as a part of that deposit, so it now looks like I received 2 checks from this person, with the one I entered today now showing that it bounced. Do I need to delete the first instance of the check? What will that do to the record of the deposit that was made?

Thanks for your help!

Thanks for getting back here, @BFriends.

I appreciate you providing additional information about the issue and for performing the steps outlined by my colleague, AlexV.

To further help you, you can void the donation check you've created instead of deleting it. This way, you still have a record of that transaction on the system. Also, before doing the steps, I suggest securing a backup copy of your company file for reference in case of data loss or damage. Once done, here are the steps to void the check:

1. Click the Lists menu and choose Chart of Accounts.
2. Double click on the account the check was written from.
3. Click on the check number/entry you want to void to select it.
4. Choose the Edit menu, then click Void Check.
5. Select Yes and then Record.

For more details about the process, see this article: Void or delete a bill or bill payment check. 

Should you need any handy sources that you can bookmark for future use, you can visit our QuickBooks Desktop Help page. The site has tons of help articles and even video tutorials that will be able to guide you on your QuickBooks tasks. 

Feel free to post here again if you have additional questions about recording your donor checks returned for NSF. I'm always around to lend you a hand. Have a good one. 

Thanks for your help, but I am not trying to cancel or void a check I wrote on our account. I am trying to delete a duplicate of a deposited check that was written to us that subsequently bounced. The first time I recorded the check for deposit, I didn't create an invoice or payment received for the check, because it was a donation (we are a church). I just recorded it through the donation icon on the home page. But when the check was returned for NSF, the instructions your colleague gave had me create an invoice and a payment received for the check, so that I could record the check as bounced. Unfortunately, the first instance of that check is still sitting in the account as a duplicate deposit to the one I created as per the instructions from your colleague. I would like to know the best way to handle that duplicate check. Should I delete it? 

Hey there, @BFriends. 

Thanks for reaching back out to the Community. Adding that extra clarification will help me determine the best solution for your business. 

There are two options that will help resolve this problem: 

• Option 1: Use the Record Bounced Check feature

• Option 2: Manually Record Bounced Check

Review this article to go through the steps to fix this properly: Handle Non-Sufficient Funds (NSF) or bounced check from customers. However, if these instructions aren't working for you, then I recommend contacting our Customer Support Team. They'll be able to use a screen share to walk you through some other steps. 

This should do the trick. I'm only a post away if you have any questions about this topic or anything else you need in QuickBooks. Have a wonderful day! Take care.

Thanks for your help! I have resolved the problem by following instructions of Alex V. for how to convert a donation to an invoice and a customer payment in order to record the donor's check as bounced. However that ended up creating a duplicate check in the system which had to be deposited before I could mark it as bounced. In order to get rid of the original check that I was not able to mark as bounced I had to delete the original check. But the original check had already been deposited together with a bunch of other donations, so I first had to delete the original deposit. That then put all of the donations that were in that deposit back into the queue to be deposited. I then deleted the original check and deposited the new payment with the other donations again, being careful to use the same date that the original deposit had had. Once I recorded the new deposit, I then went back and bounced the check and recorded the bank fee. I hope that helps anyone else who has run into this problem with a bounced donation check.

The donation still shows on the Donor contribution summary though??

Thanks for joining the Community, rloew2004.

You can use Big Red Consulting's Donor Statements app to generate statements for donations. Its Excel add-on pulls donation records from your books and creates customizable statements in a letter-like format that's ready to print.

You'll also be able to find many details about using QuickBooks in our help article archives.

Please feel welcome to send a reply if there's any questions. Have a great day!

I'm not looking to purchase an add-on.  I just want to be able to utilize my software appropriately.

I have run into the same issues and decided to do it differently so that the returned check would show correctly on the statement.

I downloaded the returned check transaction from my bank but used the donors customer name and the class of the original check with a memo that it was a returned check. The transaction then shows up listed under that donor's transactions as a negative check.  Don't know if it's official accounting but the bank account and the donor records accurately reflect what happened.

For the NSF fee I downloaded that transaction with the bank as the account, the class of the original check and a memo as to what the fee was for.  If you wanted to deduct the cost from the donor's donations you could record the fee with the donor's name but we chose not to "charge" them.

Maybe that will help someone.

Aslan,  Thank you for this post back in 2022.  I was struggling and searching the internet on how to document the NSF donation.  It is so difficult to find help with non-profit issues.  This was a simple solution, and it took the funds off the donor's total donations.  Thank you again!