Handle returned checks from customers in QuickBooks

1. Create items for tracking bounced checks and their associated charges if these items do not already exist in your company data file (otherwise, skip to step 2):
   1. Choose Lists > Item List.
   2. Click the Item drop-down arrow and select New.
   3. Click the Type drop-down arrow and select Other Charge, and then type a name this item (for example, "Bad Check").
   4. Leave 0.00 in the Amount or % field, and then click the Tax Code drop-down arrow and select Non.
   5. Click the Account drop-down arrow and select your bank account.
   6. Click Next.
   7. Repeat steps 1.c and 1.d to create a second item named "Bad Check Charge" or something similar. (This is for the service charge you will assess customers for bounced checks when you send them another invoice. (See step 4.)
   8. Click the Account drop-down arrow and select an income account (such as Returned Check Charges). If the account does not exist, click the drop-down arrow and choose Add New, and add the new income account.
   9. Click OK to save both items.
2. Record your bank's charges for a bounced check:
   1. Choose Banking > Use Register. If prompted, select the appropriate bank account and click OK.
   2. Create a new transaction, naming it "NSF Fee" or something similar.
   3. In the Payment field, enter the bank charge amount .
   4. In the Account field, enter the income account you used in step 1.h.
   5. If desired, enter a memo, and then click Record.
3. Record a credit memo to reverse the original sale:
   1. Choose Customers > Create Credit Memo/Refunds.
   2. Enter all of the items from the original invoice or sales receipt, including the sales representative and sales tax, if applicable.
   3. Enter the Bad Check line item from step 1.c with a negative amount. This amount should match the total of all the items on the credit memo, creating a credit memo with a zero total.
   4. Click Save & Close to record the credit memo.
4. Choose Customers > Create Invoices to send the customer a new invoice that should include all of the items from the original invoice, plus a line item for Bad Check Charge created in step 1.g.
   • If the original transaction was a statement charge, print a new statement charge.
   • If the original transaction was a sales receipt, recreate an invoice to send to your customer.