Customer pays invoice, payment received, check bounced, bank feed shows payment receipt and return check. How to clear

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Let me help you clear your bounced check and payment received in your bank feed in QuickBooks Online (QBO).

First, you'll need to recategorize the bounced payment to reopen the original invoice. This action will generate an expense, accurately reflecting the deducted amount and maintaining your records. Here's how:

1. Go to Transactions, then select Bank transactions.
2. Find the bounced check or returned payment in your bank feed and select to expand.
3. In the Vendor/Customer dropdown, choose the customer whose payment bounced.
4. From the Account dropdown, select Accounts Receivable, and once done, click Add.

This will offset the unpaid invoice. If your bank is not connected to QB, you can create an expense for this transaction and match it to your bank later.

Next, you'll need to unapply the bounced check payment from the original invoice. Let me guide you through the steps.

1. Go to Sales, then select Customers.
2. Select the customer whose payment bounced and find the bounced check.
3. Click Edit, then select the payment made link.
4. Untick the box for the invoice that the payment had been applied to.
5. Select the new expense you created in Step 1.
6. Once done, click Save and close.
7. A message will pop up that the transaction is linked to others. Select yes.

If your bounced check includes a bank charge, you can proceed to Steps 3 and 4 in this article: Record a returned payment or bounced check in QuickBooks Online.

Moreover, I'm adding this article as your reference to receive payment once your customer pays you for the original invoice and bank fees: Record invoice payments in QuickBooks Online.

Should you have any other concerns about clearing up your bounced checks and payments in QuickBooks Online, feel free to return to this post. I'm here to provide assistance every step of the way.