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Jatin-Oberoi
May 15, 2025
Question

Paid vendor by check, but it was returned uncashed. Recorded refund via JE, mistakenly marked paid. Feb closed—how to clear without reopening?

  • May 15, 2025
  • 1 reply
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Hi community, I'm facing a reconciliation issue and would appreciate any advice: We issued a check to a vendor and recorded it in QuickBooks. A few days later, our bank notified us that the check was never cashed, and the funds were returned to our bank account. To record the returned funds, I created a journal entry in January: Bank account: Debit Accounts Payable: Credit (selected the vendor) Later, I mistakenly marked this as paid in February. However, the payment was never actually made — the check was returned. Now that we've realized the error, the entry is showing up in the February bank reconciliation, but we already closed that month and do not want to reopen it. What is the best way to clean this up without affecting the closed February books? Should I create a vendor credit, reverse the journal entry, or handle it another way? Thanks in advance for your help!

1 reply

C
ClaireSamanthaS
May 15, 2025

I appreciate the information you've provided, Jatin. You should remove the recorded payment and set up a vendor credit. Then, you can go back to the journal entry and connect it to that vendor credit.

 

Ensuring accurate reconciliation is crucial as it verifies that your financial records correspond precisely with your bank transactions. This process is vital for identifying inconsistencies, preventing fraudulent activities, and maintaining a reliable financial overview to support informed decision-making.

 

First, let's remove the payment linked to the Journal Entry marked as paid. Create a Vendor Credit and link it to the open Journal Entry by creating an Expense.

 

Here's how to create an Expense by linking the Journal Entry and Vendor Credit:

 

  1. Go to + New, and then select Expense.

  2.  Find the payee and add the open Journal Entry  with the Vendor Credit.



  3. Once done, click Save and Close.

 

After you apply the Journal Entry and Vendor Credit, your reconciled books will remain unchanged.

 

For detailed instructions on how to create expenses in QuickBooks, please refer to this article: Enter and manage expenses.

 

You can also check out this article to learn how to print or export your reconciliation report in QuickBooks: View, print, or export a reconciliation.

Furthermore, you can schedule a free consultation with our QuickBooks Live Expert Assisted. They can provide valuable tips and guidance on managing your QuickBooks Online account.

 

I'll be around if you have more questions and inquiries about reconciliation in QuickBooks. Save this thread or circle us back by clicking the Reply button below, and I will assist promptly.

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