Returned Cheque

Look in Help under either "Returned cheque" or "Bounced cheque".

invoiced the

I did that before I posted my question, but I can't figure it out.

The QB helpfile, at least in my 2003 version, is detailed and specific as to what EXACTLY you need to do to deal with a bounced check.

If you 'can't figure it out' call in one of your co-workers to go over it step by step with you. Sometimes we all need a second opinion.

I don't have a co-worker. I own my own business.

Do this:

Go to Banking, select Make Journal Entry.

Put in the date the cheque was returned (deducted from your bank balance). I use NSF for the next column (number, or whatever).

Debit "Accounts Receivable", enter the amount of the returned cheque. Tab over to the Description column and enter the returned cheque number, and the reason (could be insufficient funds, funds frozen, account closed etc) and select the customer's name in the Name column. This will direct the amount to that customer's account in the A/R subledger.

Credit your bank account, enter the amount of the returned cheque, and JUST the returned cheque. Copy the description from the Debit line, and you do not necessarily need to use the customer name again, but you can. You can either create an invoice for YOUR service charge or enter it through the Journal. In that case, Debit the Accounts Payable, enter your fee, put your description in the field, reference the customer name. Then credit the Other Income account for the same amount. No sense I think to have to create a custom Item in the list for NSF fees. May as well use the same date as the cheque was originally returned.

IF your bank charged you a service charge on the same day, debit Bank Charges on the next line, enter the amount of the charge, copy description. Credit your bank account again, copying the description. If your bank charged you on a different date, make another Journal Entry.

-- Stephanie Serba, AICIA Partner, Durham Business Outsource Accounting and Technology

Thanks Stephanie.....appreciated...I did it right by following the help file. First time a customer bounces a cheque so I had forgotten what is the best step to record it.

Pass a journal entry crediting Bank Account and Debiting Accounts Receivable and in the name column select the name of the customer. If there is anything else that you want to know feel free to write.

Victor

myQBaccountant Team Free unlimited Quickbooks Support

invoiced the

There are probably several ways to record bad checks but this is how I was taught:

When you received the payment you recorded the payment and cleared the invoice. Your bank account shows the deposit and the customer account shows no balance. Now you need to basically undo this while keeping in synch with the transactions shown on your bank statement.

First, I have 2 Items-Other Charge set up to track the amount of the bad checks and any service charges I need to charge my customer. The "Bad Check" Item points to the checking account instead of income and the "Service charge" Item points to an Income account called Returned Check Charges.

Generate a new invoice for the amount of the bad check plus associated service charges you wish to assess the customer and mail it to the customer; Don't forget to use the Bad Check and Service Charge Items to point the transactions to the correct accounts. This new invoice will credit your bank account (Bad Check item) plus puts a new invoice onto the customers account for the amount of the original invoice plus any additional service charges (Service charge item).

Lastly, if your bank deducted a service fee from your account because of this bad check, go to your checking account register and enter the amount of this fee. I post these charges to a Bank Charge Expense account.