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When you deposit a check that your customer has given you as well as there are insufficient funds in their bank account to cover the check amount, the check will be returned to the bank. This is a type of bounced check that can be difficult to track on your books. A bounced check will result in a fine from your bank. You’ll also need to advise your consumer that their check has bounced as well as you’ll need to request another method of payment. So, here’s how to record a bounced check in QuickBooks Online in the simplest way possible. Contact the QuickBooks phone number for technical support. Experts will quickly resolve your problem.

 Let us understand why we need to record the bounced cheque in QuickBooks.

A bounced check must be recorded in QuickBooks since it affects not only your bank account and also your accounts receivable (A/R) balance and expenses. You must record the returned check as well as any additional costs charged by the bank in order to reconcile your bank account. In order to enhance your A/R balance, reverse the customer’s payment.

The following happens when a customer’s cheque bounces.

  • Account number: The amount of a bounced check will be reduced in your bank account.
  • Receivables (accounts receivable): If the customer’s payment does not go through, your accounts receivable balance will rise.
  • Fees for bounced checks: The bank deducts a fee for insufficient cash (NSF fee).

 In QuickBooks Online, there are a few stages to recording a bounced check.

You must record a reduction to the bank account for the total amount of the check to properly record a check-bounce in QuickBooks Online. Then you must record the bank’s non-sufficient funds (NSF) fee charged to the account. Finally, you must re-bill the customer for the NSF cost. You have the option of billing the customer for the cost.

To record check bounces in QuickBooks Online, follow the five steps below:

  1. Make a note of the decrease in the bank account balance.

To acquire the drop in the bank balance of the total amount of the bounced check, go to the “Write Checks” window in this first step. Because the bank normally deducts the cash from your account, we must record it in QuickBooks.

From the Homepage, tap the + sign at the top, then select the “Check” option under the “vendors” column.

  • Payee: Select the customer whose check has bounced from the drop-down option.
  • Bank account: Select the bank account where the cheque bounced from the drop-down option.
  • Date of payment: Record the date the cheque was returned.
  • Account: Select accounts receivable from the drop-down menu.
  • Share information about the bounced check.
  • Any detailed information about the customer’s bounced check should be written down in a memo.
  • Give the amount of the bounced check in this field.
  • Cheque no: In this blank field, type NSF.
  • Save: Save the check window and close it.
  1. Select the Expense Menu from the drop-down menu.

Tap the + sign at the top of the page, then pick the “Expense” option under the Vendors column.

  1. In QuickBooks online, enter the NSF Fee Expense.

Record the NSF fee that the bank charges for the bounced check in this step. The NSF Fee will be recorded as a cost in QuickBooks. To register an expense, you must first write the payee’s name. A reference number, a brief description, and the total sum must also be written.

  • To record the NSF fee, you must give the following information:
  • Payee: Select your bank from the drop-down option.
  • Bank account: Select the bank account where the cheque bounced from the drop-down option.
  • Date of payment: Record the date the cheque was returned.
  • In this field, type “Bank NSF Fee” as your reference number.
  • Account: Select the expense account for tracking bank fees from the drop-down menu.
  • In this field, write the phrase “NSF fee” as a description.
  • Enter the entire amount you were charged by the bank for the check bounce.
  • Save: When you’ve finished filling out all of the fields, click Save and then dismiss this window.
  1. In QuickBooks Online, go to Invoices.

This is an optional step. Experts advise, however, that you bill your consumer for the NSF cost you were charged by the bank. Certain establishments may charge a premium simply for being late, but this is entirely up to you.

  1. Charge the NSF Fee to the Customer

You must produce an invoice in QuickBooks to bill your customer for the NSF cost. To bill the customer for the NSF fee, fill out the details on the invoice form.

  • Select the client who bounced the check from the drop-down option.
  • Enter the date on which you want to charge your customer for this fee.
  • Service or product: Create a service called “Customer NSF fee” to keep track of customer NSF fees. To set up this fee, select “Add New” from the drop-down option and fill in the fields below.
  • Type of Item: Select “service” from the drop-down option.
  • Description of the item: Fill up the blanks with “Customer NSF Fee.”
  • Select “other income” from the drop-down menu for your income account. If you don’t have another income account set up yet, you can do so by selecting “add new” from the drop-down menu.
  • Description: Include a description of the returned check so that the consumer understands what this fee is for.
  • Write the amount you’re going to charge your customer for the bounced check (NSF fee with any additional inconvenience fee).
  • On the invoice, write the following message: Include a message to your customer on the invoice that explains why they are being charged the cost.
  • Save: When you’ve finished filling out all of the fields, click Save and Close to complete the invoice.

The Effects of Recording Bounced Checks in QuickBooks on Financial Statements

Cheque bounce might have an influence on a few accounts and financial statements. As the invoice is not paid, the accounts receivable will increase. Because the money was removed from your bank account, your cash on deposit will drop. Your expenses will also rise as a result of the NSF fee. As a result, while recording QuickBooks check-bounce, both the balance sheet report and the profit and loss statement area will be updated.

Conclusion :

Hopefully, the information in the preceding blog will assist you in resolving the problem. Call the QuickBooks phone number for technical support. Experts will assist you with any technical issues you may have.

You can also contact via email. For further information, go to Contact our executives at any time, since they are available 24 hours a day, 7 days a week.

Post Author: qbooks247

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