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QuickBooks Payment - Bank item returned NSF, Invoice still marked Paid

Forum|Forum|8 years ago
January 5, 2018
2 replies
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<p>How is it best to handle this situation? </p>
<p>Still need to notify customer that invoice is unpaid dut to NSF and add processing fees; however, QB marked paid and deposited, so Invoice is Closed.  Payment and QB processing fee returned from bank, thinking I do not want to alter deposit or bank will be off.  Do I issue a new invoice with processing fee?  Or are there steps to handle that circumstanece which reflect the open status so that customer can be notified?  Thanks.</p>

Best answer by Rustler

1. enter a payment in the bank register in that amount and use a bad debt expense account in the account block (create one first if you need to in the chart of accounts), change the check number block to NSF

2. do the same thing as a payment if the bank hit you with bounced check fees at this point your QB bank register will match the banks accounting

3. Now it is up to you, most counties have a legal procedure you must follow for bounced checks, then if the procedure does not work you can turn it over to the county attorney for processing - so you should get that procedure because if you do not follow it, when you do go to the county attorney they will want you to start all over.

as part of that procedure I create a new invoice, I create and use an item called NSF check-fee which has an income account selected on the item screen.
list that item and enter the amount of the bad check use that same item again and enter your company bounced check fee and/or the banks fee amount

And don't forget the legal requirement to have a sign posted that states what your bounced check fee is. Always good to have a pic in your phone of that sign at the check out counter. First time I went to the county attorney to submit a bounced check they asked.

OR, of course you can just forget trying to recoup the funds, in that case ignore step 3

RustlerAnswer

1. enter a payment in the bank register in that amount and use a bad debt expense account in the account block (create one first if you need to in the chart of accounts), change the check number block to NSF

2. do the same thing as a payment if the bank hit you with bounced check fees at this point your QB bank register will match the banks accounting

3. Now it is up to you, most counties have a legal procedure you must follow for bounced checks, then if the procedure does not work you can turn it over to the county attorney for processing - so you should get that procedure because if you do not follow it, when you do go to the county attorney they will want you to start all over.

as part of that procedure I create a new invoice, I create and use an item called NSF check-fee which has an income account selected on the item screen.
list that item and enter the amount of the bad check use that same item again and enter your company bounced check fee and/or the banks fee amount

And don't forget the legal requirement to have a sign posted that states what your bounced check fee is. Always good to have a pic in your phone of that sign at the check out counter. First time I went to the county attorney to submit a bounced check they asked.

OR, of course you can just forget trying to recoup the funds, in that case ignore step 3

A

Anonymous

If the customer's bank was temporarily NSF and they want to pay again via Intuit Payment Network, can they pay that same invoice again online if I remove the first payment? Or would I have to create a new invoice for them to pay online?

D

Dwayne11

Hello GJCrook,

Your customers are able to resubmit payments on the same invoice.

I'd recommend checking on your end to make sure that there isn't a payment being applied even though it was rejected. ACH payments don't send reject codes right away, so it may still show the status as being paid.

Let me know if you have more questions.

V

VENCETEO

Hi, can we know how to handle when our payment that we make have return back

R

Rea_M

Hello there, @VENCETEO.

QuickBooks makes it easy for you to handle a returned payment (due to non-sufficient funds) from your vendor. Let me guide you on how depending on the product you're using.

If you're using QuickBooks Online (QBO), you’ll have to create a journal entry and a bill payment check. This is to unlink the bill from the payment transaction.

First, you need to enter a reversing journal entry. Here's how:

Go to the + New button.
Select Journal entry.
Make sure the Date, Entry No, and Vendor name are correct.
Debit the checking account for the amount of the returned payment.
Credit the A/P account. The same amount of the returned payment.
Click Save and close

Then, unlink the bill from the payment and link it to the journal entry. Here's how:

Go to the Expenses menu.
Select Vendors.
Locate the vendor and open the original bill payment.
From the Bill Payment screen, put a checkmark in Journal Entry you’ve created.
Uncheck the Bill originally paid by the bill payment check.
Enter a Memo to indicate the payment was returned.
Select Save and close.

Finally, create a new bill payment check to record the new payment transaction. Here's how:

Go to the + New button.
Select Pay bills.
Choose the bill originally paid by the returned payment.
Fill in all the necessary details.
Click Save and close.

Meanwhile, If you're using QuickBooks Desktop (QBDT), make sure not to void the original bill payment check because it may be in a previous accounting period. For the step-by-step guide, you can check out this article: Manage a bounced check you wrote.

Additionally, I'd recommend pulling up a vendor report. This is to monitor your expenses and make sure they're accurately recorded. Just go to the Reports menu for both QBO and QBDT products.

Please know that you're welcome to comment below if you have other concerns or follow-up inquiries about managing your vendor transactions and payments in QuickBooks. I'm just around to help. Take care always.

2

2robertc

Hi- I am a QB Desktop user and followed your instructions (My check was not returned for insufficient funds but was returned because the vendor did not tell me they closed their account and opened a new one-same basic problem). Everything balances with one(1) question remaining. My "Open Balance" column equals 0, but I have a credit of $1,980 showing as a total at the bottom of my "Amount" column (See attached). Is this how it is supposed to look when complete?

Thanks for your help,

Rob

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