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Intuit

Record your bounced cheque

Find out how to enter a bounced cheque transaction in QuickBooks Online.

A cheque bounces when your bank account has non-sufficient funds (NSF) or doesn’t have enough money to cover the cheque amount. When this happens, your bank charges you an NSF or bank fee.

Check out the different bounced cheque scenarios and ways to record them in QuickBooks.

You only need to record the bank fee since your cheque was processed. To do this:

  1. Select New ⨁.
  2. Select Expense.
  3. From the Payee ▼ drop-down menu:
    • Select the supplier if the bank charged it to them.
    • Select the bank if they charged it to your account.
  4. From the Payment account ▼ drop-down menu, select the account you use to pay expenses.
  5. (Optional) To distinguish it from other expenses, enter “NSF fee” in the Ref no. field.
  6. Under the Category column, select Bank Charges.
  7. Enter the amount you were charged for.
  8. Select Save.

You need to record the bank fee and void the cheque since your supplier didn’t accept it as payment. To void a cheque and record the bank fee:

  1. Go to the Expenses menu, then select Suppliers.
  2. Select the supplier you paid.
  3. Find and select the bounced cheque.
  4. Select More, then select Void from the pop-up menu.
  5. Confirm you want to void the cheque, then select OK.
  6. Record the bank fee.
    1. Select New ⨁.
    2. Select Expense.
    3. From the Payee ▼ drop-down menu:
      • Select the supplier if they bank charged it to them.
      • Select the bank if they charged it to your account.
    4. From the Payment account ▼ drop-down menu, select the account you use to pay expenses.
    5. (Optional) To distinguish it from other expenses, enter “NSF fee” in the Ref no. field.
    6. Under the Category column, select Bank Charges.
    7. Enter the amount you were charged for.
    8. Select Save.

This causes the cheque to bounce multiple times, with multiple reversals and bank fees.

  1. Enter a journal entry to reverse the bounced cheque payment.
    1. Select New ⨁.
    2. Select Journal Entry.
    3. Enter the date the check bounced in the Journal Date field.
    4. On the first line, select the bank account from the ▼ drop-down menu in the Account column.
    5. Enter the cheque amount in the Debits column.
    6. On the second line, select Accounts Payable from the ▼ drop-down menu in the Account column. The cheque amount populates.
    7. From the Name column, select the supplier.
    8. (Optional) In the Memo field, enter a note why you created the journal entry.
    9. Select Save.
  2. Reopen the bill and link the bounced cheque to the journal entry.
    1. Go to the Expenses menu, then select Suppliers.
    2. Find and select the supplier’s name.
    3. In the Transaction List, find and select the bounced cheque.
    4. Uncheck the checkbox for the bill, then select the one for the journal entry.
    5. Confirm you want to make the changes, then select Save.
  3. Record the bank fee.
    1. Select New ⨁.
    2. Select Expense.
    3. From the Payee ▼ drop-down menu:
      • Select the supplier if the bank charged it to them.
      • Select the bank if they charged it to your account.
    4. From the Payment account ▼ drop-down menu, select the account you use to pay expenses.
    5. (Optional) To distinguish it from other expenses, enter “NSF fee” in the Ref no. field.
    6. Under the Category column, select Bank Charges.
    7. Enter the amount you were charged for.
    8. Select Save.
  4. Repeat steps 1 to 3 for every bounce.

Record the bill payment when your bank account has enough funds to cover the cheque payment.

  1. Change the payment date to the date the payment was processed.
    1. Go to the Expenses menu, then select Suppliers.
    2. Find and select the supplier’s name.
    3. In the Transaction List, find and select the bounced cheque.
    4. Change the payment date.
    5. Confirm you want to make the changes, then select Save.
  2. Record the bank fee.
    1. Select New ⨁.
    2. Select Expense.
    3. From the Payee ▼ drop-down menu:
      • Select the supplier if the bank charged it to them.
      • Select the bank if they charged it to your account.
    4. From the Payment account ▼ drop-down menu, select the account you use to pay expenses.
    5. (Optional) To distinguish it from other expenses, enter “NSF fee” in the Ref no. field.
    6. Under the Category column, select Bank Charges.
    7. Enter the amount you were charged for.
    8. Select Save.

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