This article uses the term "check", please be advised that it is applicable to all locations.

There are two options available in QuickBooks Desktop for recording checks that are returned due to lack of funds in a customer's account also known as bounced checks. Option 1 works ONLY if you are in Single-user mode. If you need to record bounced checks while in Multi-user mode, you need to follow Option 2 for manually recording NSF.

Option 1: Use the Record Bounced Check feature

 
IMPORTANT
The Record Bounced Check feature only applies to Check payments. If you have a returned ACH item, change the payment type to check then follow these instructions. If the Record Bounced Check icon remains greyed out, or if you are unable to follow these steps due to the payment type being greyed out, please follow steps in Option 2 to manually record the bounced check.
  1. From the QuickBooks Customers menu, select Customer Center.
  2. Go to the Transactions tab, then select Received Payments.
  3. Double click the payment you want to record as NSF.
  4. On the Receive Payments window, select the Record Bounced Check icon on the Main ribbon tab. Note that the check must not be waiting to be cleared in the Undeposited Funds account, as it would have to have cleared the bank in order to bounce.
  5. In the Manage Bounced Check window, enter the following information, then select Next.
    • Bank Fee and Date
    • Expense Account for the Bank Fee
    • Class
    • Customer Fee (how much you charged the customer)
      NOTE: All these fields are optional. You can leave them blank if you didn't incur any charge or if you do not want to charge the customer for the NSF check.
  6. QuickBooks will show you the Bounced Check Summary, for you to know what happened behind the scenes.
    For example, you may see:
    • The following invoices will be marked unpaid
    • The following fees will be deducted from your bank account
    • This invoice will be created for the fee you want to charge your customer.
  7. Select Finish.
  8. You will then see a Bounced Check indicator on the customers payment letting you know you just used the bounced check feature on that payment.
  9. QuickBooks creates a journal entry debiting your accounts receivable account and crediting your bank account. The original invoice is marked unpaid, so you can re-invoice the customer.

Option 2: Manually record bounced check

Follow these steps if you need to record bounced checks while you are in multi-user mode:

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