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I had 3 checks from donors returned last month for NSF. They were part of batches of multiple checks that were deposited into the bank. I'm not sure how to record these as journal entries. On my bank statement it says 'Chargeback'.
Thank you for posting here in the Community, @jeffbrown614.
Let me guide you on how to record returned donation checks in QuickBooks Desktop.
To start, you can create an item, and income account for tracking bounced checks and their associate's charges.
Once done, create a journal entry to reverse the original payment. Here's how:
After, switch the payment for the invoice to the reversing journal entry.
For additional information, you can refer to this article for details: Handle Non-Sufficient Funds (NSF) or bounced check from customers.
In case you want to handle a check returned by your vendor due to non-sufficient funds, you can check this article: Manage a bounced check you wrote.
Please let me know if there's anything I can help you with QuickBooks. I'm always around whenever you need help. Have a nice day.
Thanks for this but I'm not sure I've done this correctly. The returned checks are from donors, not customers. Two are to our General Fund and one to our Building Fund. The checks were all part of a batch of multiple checks.
You mentioned creating an item, and income account - not sure what you mean by this. I did steps 1-6 and put the name of the person in the Name column as a customer and I see the entry listed as a payment. Not sure how to proceed from there and if I've even done that correctly. Guess what is confusing me is that these persons are not customers but making donations - there are no invoices, etc. Sorry if I'm not understanding - I'm new to the job (quite unexpectantly) and not a CPA.
Hi there, @jeffbrown614.
Thank you for reaching back to the Community. Good job in creating the Journal Entry. The reason why you don't see the receive payments its because you haven't run any invoice. So journal entry helps you record the transaction.
After creating a journal entry, we need to switch the payment for the invoice to the reversing journal entry to receive the payments. You can follow my colleague steps provided above.
To learn more how journal entry works, you can check out this article: A QuickBooks Refresher on Journal Entries.
I suggest reaching out to your account for advice to prevent any discrepancies in your book.
You can also check this article how to handle bounce check: Manage a bounced check you wrote.
Please let me know if you need anything else, I'll be here to lend a hand. Have a great day!
Jeff,
Like you I volunteer as treasurer for my church and am not an accountant. I handle returned donation checks in a simpler fashion than others have described, especially when they were deposited in a batch with many other good checks and when, as is often true today, the bank does not charge an NSF fee.
To start, skip what was said about creating an item, and an income account for tracking bounced checks and their associated charges. If there are charges, you can create an expense account called something like bank fees to enter and track those if you don't already have such an account.
Create a journal entry to reverse the original deposit. Here's how:
Hope this helps.
John, like you, I do the books for a non-profit. QuickBooks online does not have a good way to handle returned/ bounced donations. I had also done the simple journal entry as you suggested. However, the donor's account is only affected if you use accounts receivable, which throws off your accounts.
The original donation had gone to an income account, so I made the debit to the income account and the credit to the bank account that the original deposit hit. I had entered the donor name and the appropriate class. But QuickBooks did not change the donor's account. So the accounts will be right, but the donor will show as having given money that did not actually clear. Then when the replacement donation hits, it will look like he gave again. You can't do any sort of negative donation, voiding, or otherwise accounting for the customer's /donor's portion.
Any other thoughts, or ideas?
Sorry, we use separate software to record and provide annual receipts for donations, so I am not familiar with using QuickBooks to do that. Thus, I have not encountered the problem you have mentioned and cannot provide any advice on dealing with it. I hope someone else can help you.
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