QB 2014 Makes Accounting for Returned Checks Easy

January 5, 2014

QuickBooks 2014 is making the accounting for returned checks (bounced, bad, or NSF) a snap. This new feature has been desired for a long time, and works very well in the accounting end of QuickBooks. Not only will it record the charge in your bank account, record the bill to the customer for the bank fee, and record the bank fee expense, but it will also change the invoice to “unpaid”. For this new feature to work the pay method has to be entered when received as “check” and doesn’t work yet for credit card payments or cash payments.

Follow these instructions on recording the returned check:

1. Go to Customer Center, choose the Transactions tab, and click “Received Payments”.

2. Find the Customer that had the returned check on the right side of the window. PAY METH must say “check” (you can go back to the original payment and make the method “check” if it is not).

3. Double click on the check, then click on the option at the top of the Customer payment window called “Record Bounced Check”.

4. A new window will pop up called “Manage Bounced Check”. Enter the bank fee, date, expense account (bank service charge), class (if using classes), and how much you want to charge your customer for the returned check. Click “Next”.

6. Now a QB message will tell you what is going to happen when you click “Record Bounced Check”.

  • The following invoice will be marked unpaid: Invoice #/Name/Unpaid amount
  • These fees will be deducted from your bank account: Checking: Check # and amount deducted; Checking: Service Fee amount deducted
  • This invoice will be created for the fee you want to charge your customer: Invoice/Customer name/Amount

7. Before you click “Finish” make sure the amounts are correct; at this point you can still change information.

8. Click “Finish” and the work is done.

QuickBooks makes journal entries for the fees, creates a new invoice for the fee, and shows the original invoice as “Unpaid” all in one step.