Recording a Bounced Check in QuickBooks Online: A Simple Guide

Hey there! Today, I’m going to walk you through the process of recording a bounced check in QuickBooks Online. It may sound daunting, but don’t worry – I’ve got your back!

So, why would a check bounce? Well, sometimes it happens when there’s not enough money in the account to cover the payment. It can be a bit frustrating, but with QuickBooks Online, you can easily handle the situation and keep your financial records in order.

To get started, follow these simple steps:

1. Firstly, log in to your QuickBooks Online account. If you’re like me, and always forget your password, make sure to have it handy!

2. Once you’re in, head over to the Banking tab. You’ll find it on the left-hand side of the screen. Click on it, and a new window will pop up.

3. In this new window, you’ll see a list of your bank accounts. Select the one that received the bounced check – it’s important to choose the right one!

4. Okay, now comes the fun part! Look for the check that bounced in the list of transactions. You’ll be able to identify it by the word “NSF” or “Bounced” indicated beside it. Click on the check to open it.

5. Now, you’ll need to make some changes to the check. Find the box that says “Deposit to.” Instead of leaving it blank, select “Expense” from the drop-down menu. This will help you keep track of all the fees associated with the bounced check.

6. Below the “Account” field, you’ll find a space to enter the amount of the bounced check. Take a deep breath and type it in. Remember, it’s important to accurately reflect the amount.

7. Almost there! Now, you’ll want to fill in the details of the expense. In the “Category” field, select an appropriate category for the fee associated with the bounced check. This will help you organize your expenses later on.

8. Additionally, you can add a memo in the “Description” field to remind yourself of any important details about the bounced check. It’s always helpful to have that extra bit of information!

9. Finally, click on “Save and close” to save your changes. QuickBooks Online will now update your records and reflect the bounced check in your account.

And that’s it! You’ve successfully recorded a bounced check in QuickBooks Online. See? It wasn’t so bad after all!

Remember, it’s essential to keep your financial records accurate and up-to-date. By following these steps, you can stay on top of any bounced checks and maintain a clear understanding of your financial situation.

So next time you encounter a bounced check, don’t stress – just follow this guide, and QuickBooks Online will have you covered!

If you deposit a check that someone gave you, but they don’t have enough money in their bank account, the check will be sent back to your bank. This is called a bounced check.

It’s really hard to keep track of bounced checks when you’re recording them. That’s why it’s a good idea to use QuickBooks to keep a record of them.

In this article, I’ll explain how to record bounced checks in QuickBooks Online.

Why is it important to record bounced checks in QuickBooks?

Bounced checks can affect not only your bank account, but also your accounts receivable (A/R) expenses and balance.

When a check is sent back to your bank because there isn’t enough money, the following things happen:

1. The money in your bank account is reduced by the amount of the bounced check.
2. Since your customer couldn’t pay, your accounts receivable balance increases.
3. Your bank charges you a fee for the insufficient funds.

So, if you want to keep your bank account in order, you need to keep track of the extra fees and the bounced check itself. You can easily do this by recording bounced checks using QuickBooks.

How to record a bounced check in QuickBooks Online

This section will show you the steps to record a bounced check using QuickBooks Online. There are three main steps:

1. Record the decrease in your bank balance.
2. Record the insufficient funds fee.
3. Optional: Bill your customer for the insufficient funds fee.

I’ll explain each step in detail.

Record the decrease in your bank balance

To record the decrease in your bank balance, go to the Write Checks window. There you’ll see the amount that was taken out of your bank account. That’s the amount you need to record in QuickBooks.

On the QuickBooks homepage, click on the plus sign at the top. A drop-down menu with different categories will appear.

To select a check from the Vendor category, just follow these steps. First, click on the Check option in the Vendor category. As soon as you click, the Write Check window will pop up on your screen. This is where you’ll have to input all the necessary information. Make sure you include the following details:

1. To start, let’s enter the date when your check was returned.
2. Next, select the bank account where the check was returned.
3. Choose the customer whose check bounced.
4. Select the appropriate accounts receivable.
5. Provide the details about the bounced check.
6. Add any additional information or notes about the bounced check.
7. Enter the amount of the returned check. Please do not include the NSF fee.
8. Enter the non-sufficient funds fee in the check number field.
9. Save your entered information and close the window.

To move on to the next step, select the Expense option from the Vendors category.

Recording the NSF Fee

Now, we need to record the non-sufficient funds fee charged by your bank. This will be entered as an expense.

To do this, you’ll need to provide the necessary information in the Expense window. Here’s what you need to fill in.

1. First, choose your bank as the payee.
2. Select the bank account where the check bounced.
3. Now, choose the account you use to track bank fees.
4. In the appropriate field, type “Bank NSF Fee” for the reference number.
5. Similarly, type “Bank NSF Fee” for the description.
6. Enter the amount of the NSF fee that you have been charged.
7. Save your entered information and close the window.

That’s all you need to do to record a bounced check. It’s simple, isn’t it? If you want to bill your customer for the non-sufficient funds fee, you can create an invoice, but it’s completely optional.

Here’s How to Bill Your Customer for the NSF Fee:

From the homepage, click the plus sign and select “Invoice” under the Customers category. This will open the Customers window where you can create an invoice.

Just like when you normally bill your customer, you need to complete the form. The only difference is that you’ll use the “Customer NSF fee” option.

Let me walk you through it:

1. Select the customer whose check bounced.
2. Enter the date you want to bill your customer for the NSF fee.
3. To track NSF fees, set up the “Customer NSF fee” service option. Click on “Add New”.

When you choose the “Add New” option, you need to fill out the required fields.

In the “Type” section, choose “Service”. In the “Item Description” field, type “Customer NSF Fee”.

Lastly, under “Income Account”, select “Other Income”. This completes the Product/Service step. The remaining information you need to enter includes:

1. Describe the fee, so your customer knows what they’re being billed for.
2. Enter the amount of the NSF fee. You can also add the inconvenience fee if applicable.
3. Add a message for your customer to see on the invoice.
4. Save your entered information and close the window.

Track Bounced Checks Efficiently with QuickBooks

Recording bounced checks on QuickBooks may initially seem complicated, but it’s actually quite easy. Just follow these instructions, and you’ll be done in no time!

Did you find this tutorial helpful? Have you already recorded a bounced check through QuickBooks Online? Let us know in the comments below.