QuickBooks Online - NSF - Returned Checks/ACH Transactions - Manual Process

When a customers check gets returned by the bank (NSF) the payment needs to be removed from the invoice so it will show in the collection center to be processed for new payment.

It is important not to edit the payment that was originally tied to the invoice because it may have been in a prior accounting period.

RECUR360 has an automation process to handle this, but here are manual instructions:

For QuickBooks Online you would create a new invoice. The steps for that are here:

https://QuickBooks.intuit.com/community/Help-Articles/Record-a-bounced-check-using-an-invoice/m-p/186349  

Step 1: Enter the bounced check as an expense

The first step is to enter the bounced check as an expense:

1. Select + New.
2. Select Expense
3. In the Payee field, select the name of the customer who's check bounced.
4. From the Payment Account dropdown, select the account the money was supposed to go into.
5. In the Payment date field, enter the date you found out the check bounced.
6. Select and open the Category details ▼ dropdown.
7. In the Category field, select Accounts Receivable.
8. In the Amount field, enter the amount of the bounced check.
9. In the Description field, enter a note, such as "bounced check" or "NSF check."
10. When you're done, select Save and close.

This expense offsets the unpaid invoice.

Step 2: Unapply the bounced check payment from the original invoice

The next step is to change the bounced check entry and make the original invoice open again. We aren't changing the original invoice, we're disconnecting the bad payment:

1. Go to the Sales or Invoicing menu.
2. Select the Customers tab.
3. Find and select the name of the customer who's check bounced.
4. Find select the record for the bounced check.
5. In the Received payment window, select and uncheck the box for the original invoice the bad check was attached to.
6. Select the checkbox for the expense you just created in "Step 1:  Enter the bounced check as an expense."
7. Select Save and close.

You removed the bad check from the original invoice, made the invoice open again, and applied the accounting you did in Step 1. To double-check:

1. Go to the Sales or Invoicing menu.
2. Select the Customers tab
3. Find and select the name of the customer who's check bounced.
4. Look for the original invoice and check the Status column. It should now say "Open."