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Handle Non-Sufficient Funds (NSF) or bounced check from customers

This article discusses how to handle checks that are returned due to lack of funds in a customer's account (bounced checks).

Note: This only works if the payment method is Check on the customer payment. If you have a returned ACH item, change the payment type to check then follow the instructions outlined in this article.

Detailed instructions

QuickBooks Desktop lets you record a bounced check automatically using the Record Bounced Check feature.

  1. From the Customers menu, click Customer Center.
  2. Go to the Transactions tab and click Received Payments.
  3. Double click the payment you want to record as NSF.
  4. On the Receive Payments window, click the Record Bounced Check icon on the Main ribbon tab.
    • Note:  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 in:
    • 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. Click Next.
  7. QuickBooks will then show you the Bounced Check Summary, letting you 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.



  8. Click Finish.
  9.  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.




  10. 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.
KB ID# HOW21159
10/21/2016 10:20:28 PM
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