QuickBooks Tip #6 - Handling Return Checks From Customers

QuickBooks Tip #6

Most companies will eventually deal with the customer who bounces a check.   To make your reconciliation an easier task, we suggest the following procedure:

How to handle return checks from customers.

• Create an Other Charge Item called Bounced Check or NSF. In the description field I usually say something like "Your check # has been returned, please remit replacement payment immediately." For the Account enter your Checking account.

• Now, Invoice the customer for the Item Bounced Check and enter in the check #, Invoice # and other information about the check. This takes the money out of your checking account and puts it back on the customer A/R

• I usually also create an Other Charge Item called NSF Fee and charge my customer for any service charge I received from my bank. You can put this to your account for Bank Service Charges to offset what your bank charged you or to a Misc. Income account.

• When the customer sends a replacement check, Receive Payment as usual and make your deposit.

Don't Delete!


Despite the temptation, you really don't want to delete the returned check from the original deposit.

For more QuickBooks Tips, explore http://bit.ly/TipSeries. If you have any questions about this tip or any other tips, please email Marketing@CoverRossiter.com or call 302-656-6632. Visit our website at www.CoverRossiter.com/ for more information about our firm and its services.