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BFriends
August 13, 2021
Question

How to record donor checks returned for NSF?

  • August 13, 2021
  • 1 reply
  • 0 views

I have been using QuickBooks Desktop for Windows for a couple of years now, and have just run into the problem of a donor's check being returned for non-sufficient funds. I work for a non-profit, so there is no invoice attached to the donor's check. When I try to go to received payments, there are no payments listed for any donors, though I have received many payments over the course of the year. I created the income account and the item for the returned check, so I can create a journal entry, but then I am stuck because I can't find the transaction in received payments. Also, I am confused by the accounts receivable. Does that refer to the charge item? What is going on here and how do I fix it? All of the instructions I have found rely on their being a record of the check in accounts receivable or in the received payments, but there is no record of the check in either. Also, the bank charged us a fee for the returned check. How do I record this? Unfortunately, I can't ask the donor to cover the charge.

1 reply

AlexV
AlexV
August 13, 2021

Hello BFriends!

 

Thanks for reaching out to us. Let me assist you in tracking the bounced check from your donor.

 

I understand that there's no invoice created for this payment. However, for us to successfully record this, you'll want to create one so we can use the Record Bounced Check feature which is the easiest way. Simply go to the Customers menu and select Create Invoices. Enter the details needed, like the donor and amount, then tap Save & Close.

 

Once done, follow these steps:

  1. Go back to the Customers menu and select Receive Payments.
  2. Select the donor, Check as the payment method, and the invoice you created.
  3. Click Save & Close.

 

From the Customers menu, click Customer Center, then select the donor's name. From the Transactions tab, choose Received Payments from the Show drop-down. From there, double-click the payment you just recorded. Then, follow these steps:

  1. On the Customer Payment window, click the Record Bounced Check button.
  2. On the pop-up, enter the bank fee, date, and the expense account for the bank charges.
  3. Click Next, then Finish.

 

If the Record Bounced Check button is greyed-out or you received a message when clicking it, you can fix it by recording a bank deposit. Then, open the payment again and attempt to record the bounced check again.

 

You'll want to check this link: Reconcile an account in QuickBooks Desktop. This will explain the steps if you need help in balancing your books.

 

Comment below if you have additional concerns. I'll be here!

B
BFriendsAuthor
August 16, 2021

Thank you for your response! I went through the process, but I have one more question. I had originally recorded the donation check that bounced through the donation link on the "Home" page and deposited it with a bunch of other checks and donations that day. It is still showing up as a part of that deposit, so it now looks like I received 2 checks from this person, with the one I entered today now showing that it bounced. Do I need to delete the first instance of the check? What will that do to the record of the deposit that was made?

Thanks for your help!

DivinaMercy_N
DivinaMercy_N
August 16, 2021

Thanks for getting back here, @BFriends.

 

I appreciate you providing additional information about the issue and for performing the steps outlined by my colleague, AlexV.

 

To further help you, you can void the donation check you've created instead of deleting it. This way, you still have a record of that transaction on the system. Also, before doing the steps, I suggest securing a backup copy of your company file for reference in case of data loss or damage. Once done, here are the steps to void the check:

 

  1. Click the Lists menu and choose Chart of Accounts.
  2. Double click on the account the check was written from.
  3. Click on the check number/entry you want to void to select it.
  4. Choose the Edit menu, then click Void Check.
  5. Select Yes and then Record.

 

For more details about the process, see this article: Void or delete a bill or bill payment check. 

 

Should you need any handy sources that you can bookmark for future use, you can visit our QuickBooks Desktop Help page. The site has tons of help articles and even video tutorials that will be able to guide you on your QuickBooks tasks. 

 

Feel free to post here again if you have additional questions about recording your donor checks returned for NSF. I'm always around to lend you a hand. Have a good one. 

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