How to handle a bounced check in QuickBooks Online
A customer’s check bounced, so a payment you already recorded didn’t actually clear. Now your books show money you never received. Here’s how to reverse it cleanly in QuickBooks Online, including the bank fee, so everything ties back out.
What’s actually happening
When a customer’s check bounces, you’d already marked their invoice as paid and the deposit as received. In reality, the money got pulled back out. So you have three things to undo or account for: the invoice needs to look unpaid again, the deposit needs to come back out of your books, and any bank fee your bank charged you needs recording. Handle all three and your books match your bank again.
Step by step
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Confirm what your bank actually did
Check your bank activity for the bounced check: the reversal of the deposit and any non-sufficient funds (NSF) fee they charged you. You’ll match your books to these real amounts.
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Reverse the payment so the invoice reopens
The customer’s original invoice was marked paid by that check. Undo that so the invoice shows as unpaid again and the money is no longer counted as received. QuickBooks offers a bounced-check or “record bounced check” flow on the original payment that walks through this.
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Record the bank fee as an expense
The NSF fee your bank charged you is a business expense. Record it against a
Bank ChargesorBank Feesexpense account so your books capture that real cost. -
Optionally, charge the customer a fee
If you pass an NSF fee on to the customer, create a new invoice or add a line item for it. That’s income to you, separate from the bank’s fee to your business.
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Reconcile to confirm it ties out
After recording everything, your bank account in QuickBooks should match your actual balance again, the original deposit reversed, the fee recorded. A quick reconciliation confirms nothing’s left dangling.
Common mistakes to avoid
- Just deleting the original payment. It seems simple, but it can leave your deposit, reporting, and reconciliation out of sync. Use a proper reversal so everything stays connected.
- Forgetting the bank fee. The NSF charge is a real expense. Leave it out and your books won’t match the bank.
- Confusing the bank’s fee with a fee you charge the customer. One is your expense, the other is your income. Record them separately.
Want a pro to check you’re doing this right?
A bounced check touches several parts of your books at once, which is exactly why it’s easy to get tangled. If you’re keeping your own books but want an expert to walk you through it, our bookkeeping consulting gives you one-on-one time with our Bookkeeping Manager, guidance without the cost of a full-time bookkeeper.
This guide is general information, not tax or accounting advice. When in doubt, confirm with a professional.