Posting Returned Checks

There is a great help topic on this. I am going to post all of the ways you can handle this below. Pick out the way you want and follow the instructions for that: 

How do I record a bounced check from a customer that was received through accounts receivable.
Answer ID: 1086
 

A bounced check can be entered using an invoice, a check, or a journal entry. The check would need to have come from a customer where accounts receivable has been used. For example, it may have been entered using Receive Payments, a Sales Receipt, a Deposit received that was entered on an invoice, or in Make Deposits – where the deposit was posted to Accounts Receivable.

Entering by Invoice
Entering by Check
Entering by Journal Entry
Entering payment for bounced check
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To enter the bounced check by invoice:

To enter by invoice, you must have a product service item that uses the bank account and one that uses either a bank service charge income or expense account.

To create the product service items:

Go to the Customers tab and click Products & Services List.
At the bottom, click New.
In the Name field, enter for example, Bounced Check.
From the Account drop down list, select the bank account the check was returned on.
Click Save.
On the next item, in the Name field, enter for example, Bounced Check Fee.
From the Account drop down list, select (or Add New) an income account named, for example, Bounced Check Fees, or select your bank charges expense account.
Click Save.
To create the Invoice:

Go to the Customers tab and click Create Invoice.
Select the customer whose check bounced.
Enter the date the check bounced.
From the Product/Service drop down list, select the bounced check item.
Under amount, enter the amount of the check that bounced.
On the second line, select the bounced check fee item.
Under amount, enter the amount you are charging your customer for the bounced check.
Click Save.
To enter the bank service charge:

Go to the Banking tab and click Write Checks.
Enter the date the check bounced.
At the top right, uncheck “To be Printed” if it is checked, then enter a notation in the check number field, for example, NSF fee.
In the amount field, enter the amount the bank charged you for the bounced check.
At the bottom, from the Account drop down list, select your bank charges expense account.
Click Save.
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To enter by Check:

Go to the Banking tab and click Write Checks.
Enter the date the check bounced.
At the top right, uncheck “To be Printed” if it is checked, then enter a notation in the check number field, for example, NSF check.
From the Pay to the Order of drop down list, select the customer name whose check bounced.
Enter the amount of the check that bounced.
At the bottom, from the Account drop down list, select Accounts Receivable.
Click Save.
Change the payment entry to apply to the bounced check entry:

Go to the Customers tab and click Customer List.
Click once on the customer name to highlight it.
At the bottom, click Register.
Click on the Receive Payment entry for the bounced check, to open it.
Uncheck the invoice it was applied to, and check the check entry.
Click Save.
Create an invoice for the bounced check fee: (you must have a product service item for fees you are charging the customer, see directions below these steps.)

Go to the Customers tab and click Create Invoice.
Select the Customer whose check bounced.
Enter the date the check bounced.
From the Product/Service drop down list, select the bounced check fee item
Under Amount, enter the amount you are charging the customer for the bounced check.
Click Save.
To create the product service items:

Go to the Customers tab and click Products & Services List.
At the bottom, click New.
In the Name field, enter for example, Bounced Check.
From the Account drop down list, select the bank account the check was returned on.
Click Save.
On the next item, in the Name field, enter for example, Bounced Check Fee.
From the Account drop down list, select (or Add New) an income account named, for example, Bounced Check Fees, or select your bank charges expense account.
Click Save.
To enter the bank service charge:

Go to the Banking tab and click Write Checks.
Enter the date the check bounced.
At the top right, uncheck “To be Printed” if it is checked, then enter a notation in the check number field, for example, NSF fee.
In the amount field, enter the amount the bank charged you for the bounced check.
At the bottom, from the Account drop down list, select your bank charges expense account.
Click Save.
To print a statement to send to the customer:

Go to the Customers tab and click Customer List.
Double click on the customer name.
At the upper right, click on Create Statement.
Select type and dates.
Click OK.
At the bottom right, click Print or Send.
Back to top

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To enter by Journal Entry:

Go to the Banking tab and click Make Journal Entry.
Enter the date the check bounced.
From the Account drop down list, select Accounts Receivable.
Under Debit, enter the amount of the bounced check.
Under Memo, enter a notation explaining the reason for the journal entry.
From the Name drop down list, select the customer name.
On the second line, from the Account drop down list, select the bank account.
The credit and memo will enter.
Click Save.
To change the first payment to apply to the journal entry:

Go to the Customers tab and click Customer List.
Click once on the customer name to highlight it.
At the bottom, click Register.
Click on the Receive Payment entry for the bounced check, to open it.
Uncheck the invoice it was applied to, and check the journal entry.
Click Save.
To enter the bank service charge:

Go to the Banking tab and click Write Checks.
Enter the date the check bounced.
At the top right, uncheck “To be Printed” if it is checked, then enter a notation in the check number field, for example, NSF fee.
In the amount field, enter the amount the bank charged you for the bounced check.
At the bottom, from the Account drop down list, select your bank charges expense account.
Click Save.
To create an invoice for the bounced check fee: (you must have a product service item for fees you are charging the customer, see directions below these steps.)

Go to the Customers tab and click Create Invoice.
Select the Customer whose check bounced.
Enter the date the check bounced.
From the Product/Service drop down list, select the bounced check fee item
Under Amount, enter the amount you are charging the customer for the bounced check.
Click Save.
To create the product service items:

Go to the Customers tab and click Products & Services List.
At the bottom, click New.
In the Name field, enter for example, Bounced Check.
From the Account drop down list, select the bank account the check was returned on.
Click Save.
On the next item, in the Name field, enter for example, Bounced Check Fee.
From the Account drop down list, select (or Add New) an income account named, for example, Bounced Check Fees, or select your bank charges expense account.
Click Save.
To print a statement to send to the customer:

Go to the Customers tab and click Customer List.
Double click on the customer name.
At the upper right, click on Create Statement.
Select type and dates.
Click OK.
At the bottom right, click Print or Send.

Back to top
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Receiving payment for the bounced check

When the customer gives you a new payment to cover the bounced check you would record that in the Receive Payments screen:

Go to the Customers tab and click Receive Payments.
Enter in the new payment information.
Under Invoices and Other Charges you will see the bounced check transaction and fees listed, click the checkbox next to each item.
Click Save.
 

I forgot to say, I prefer the by check method as it can be the easiest in my opinion.

You have to create a suspense account in QB. When you charge back the bounced check from your check book, it will go directly to your Suspense Account. When you reverie the replacement check you will charge it to your suspense account .It will not show double income.

PM