Hi I have an Ach payment made through my bank (Not Quickbooks) that was returned a few days later. How would I categorize both of these transactions?

I know how you can categorize ACH returned payments in QuickBooks Online (QBO), @DSIOffice.

You can create a journal entry and a bill payment check to record the returned payment. Let’s go through these steps one at a time:

Firstly, let's enter a reversing journal entry. Here's how:

1. Sign in to your QuickBooks Online (QBO) account.
2. Click the + New button, then select Journal Entry.
3. Make sure the Date, Entry No, and Vendor name are correct.
4. Debit the checking account for the amount of the returned payment.
5. Credit the A/P account for the amount of the returned payment.
6. Click Save & Close.

Then, unlink the bill from the payment check and link it to the journal entry.

1. Click Expenses from the left menu, then select Vendors.
2. Locate the vendor you need, and open the original bill payment.
3. From the Bill Payment screen, put a checkmark in the Journal Entry you’ve created.
4. Uncheck the Bill you originally paid.
5. Enter a Memo to indicate the returned payment.
6. Then, click Save & Close.

Lastly, you'll have to create a new bill payment check to record the new payment transaction. 

1. Click the + New button, then select Pay Bills.
2. Choose the bill you originally paid.
3. Complete all other required information.
4. Click Save and Close.

I recommend reaching out to your accountant if you’re uncertain about these steps. They can help you navigate the process, as it can be tricky.

Additionally, you can also check this article for more details about returned payments: Record a returned payment or bounced check in QuickBooks Online 

Furthermore, I'd recommend regularly reconciling your accounts (monthly) to effectively track your business expenditures and keep your financial data updated.

I want to ensure you have a smooth experience processing returned payments in QBO. Reply or create a new post below if you have additional questions. We'll reply as soon as possible. Keep safe, and have a good one.