NSF check stands for Non-Sufficient Fund check. In QuickBooks accounting software, sometimes you might receive an NSF check or Bounced check from the customers.
If you don’t record or handle these checks properly, then your account will not be balanced and will not be well documented. You must record these NSF or bounced checks in order to keep your account balanced and well documented.
Today in this article we will give you the steps and solutions to record and handle your NSF or bounced check properly. You should read the article till the end and should follow all the steps. In case you need to talk to an expert in this field, you can dial our toll-free number +1-844-405-0904.
Table of Contents
QuickBooks Desktop For Windows Users
In this section, we will learn different methods to record and handle NSF or bounced checks efficiently in QuickBooks Desktop for Windows.
Points To Remember Before You Start The Process
Some of the points that you should keep in mind before you start the process :
- You can use the “Record Bounced Check” feature in single user mode only and this feature can be only applied to the check payment which is made by the Customer Payment window.
- Incase of returned ACH item you have to switch the payment type to Check before you start the process of recording the NSF or bounced check in QuickBooks Desktop for windows.
- In some cases,the payment method may be grayed out and you might face some problems to follow the steps, then you can use the 2nd Method mentioned below.
Different Methods To Record NSF Or Bounced Check
Now let us have a look at different methods that you can use to record NSF or bounced check in QuickBooks Desktop for windows.
1st Method:
- First of all you have to open the “Customers” section and then click on “Customer Center”.
- Then you have to click on the “Transactions” tab and then click on “Received Payments”.
- Then you have to double click the payment that you want to record as an NSF or Bounced check.
- Then on the Received Payments window you will see a “Record Bounced Check” icon on the Main ribbon tab, click on the “Record Bounced Check” icon.
- Then you have to open the “Manage Bounced Check” window and enter the details such as “Bank Fee and Date”, “Expense Account for the Bank Fee”, “Class”, “Customer Fee”. Filling these details are optional, if you don’t want to fill these details you can leave them blank.
- Then QuickBooks Desktop will display you the “Bounced Check Summary”, so that you know which invoices will be marked unpaid, which fees will be deducted from the bank and the invoices that will be created for the customer fee.
- Then you have to click on “Finish” to complete the process.
2nd Method:
- First of all you have to create an item and income account in order to track the NSF checks and the charges associated with them.
- You have to create an income account.The type of the account will be “Income Account” and the name will be “Bounced Checks Income”.
- Then you have to create a “Bad Check Charge item”. The name of the item will be “Bad Check Charge”, the tax code of the item will be Non taxable, and the account will be Bounced Checks Income created in the previous step.
- Then you have to create a Journal entry in order to reverse the original payment.
- You have to open the “Company” menu and then click on “Make General Journal Entries”.
- Then you have to debit your account receivables for the amount of the NSF or bounced check.
- Then you have to go to the “Memo” column and describe the transaction by writing a small note in that column.
- Then you have to go to the “Name” column and enter the name of the customer or the name of the organisation associated with the NSF or bounced check.
- Then you have to credit the checking or bank account which received the original deposit.
- Then you have to click on “Save & Close”.
- Then you have to open the “Reports” menu and then click on “Customers Receivables” and then select “Customer Balance Detail”.
- Then you have to double click the original payment line for the Non-Sufficient Fund transactions.
- Then you have to go to the Received Payments window and then you have to move the check mark from the invoice and place it in the Reversing journal entry.
- Then you have to click on “Save & Close”.
- Then you can resend an open invoice if you want.
- You have to open the invoice where the bounced check was generated.
- Then you have to add the item named “Bad Check Charge” which was created in the above steps.
- Then you have to click on the Email icon present on the Main ribbon tab and then click on “Send”.
QuickBooks Desktop For Mac Users
In this section we will learn different methods to record and handle NSF or bounced checks efficiently in QuickBooks Desktop for Mac.
Points To Remember Before You Start The Process
Some of the points that you should keep in mind before you start the process:
- The Bounced check feature can be used only if the payment made by the customer is a check which is already entered in QuickBooks by yourself.
- It should not be deposited to the Undeposited Funds account.
Steps To Record NSF Or Bounced Check In QuickBooks Desktop For Mac
Now let us have a look at the steps to record or handle NSF or Bounced check in QuickBooks Desktop for Mac
- First of all you have to open the “Customers” menu and then click on “Receive Payment”.
- Then you have to find the check and open it, then click on “Bounced Check”.
- Then you have to enter the information required. You must be aware of the fact that QuickBooks creates a bank service charge expense account if you don’t have it.
- Then you have to click on “Next” and thus a window will appear displaying the explanation of what will happen with bank fees, check and invoices.
- Then you have to click on “Record”. Now the invoice includes a Bounced Check Charge for the customers. It is also unpaid and outstanding. QuickBooks creates a “Returned Check Charges” income account for the charge if you don’t have it.
Final Words
We hope that now you can record and handle the NSF or bounced check easily by yourself. Just follow all the steps carefully, the methods and solutions discussed in this article will definitely help you. If you still face some confusion or problems regarding this, you can dial +1-844-405-0904 to talk to our technical support team.