and now we will learn how to record bounce checks from customers where the customer was
given a sale receipt there is no bounced check tool for checks received from sales receipts you
would have to specifically set up your QuickBooks file to be able to record bounced checks where the
customer was given a sale receipt it's very easy to set up your file for bounced checks from sales
receipts first make an item on the items list that decreases the bank account use this item
to reduce the bank account for the check and the fee that the bank charges and of course we also
use the item that QuickBooks automatically created in our previous video to record the income from
our charge to the customer here is our items list now notice the bounced check charge called other
charge is on the list and that was an item that QuickBooks created the very first time we used
the bounced check tool QuickBooks created this item and if we double click and open it up we see
that this bounced check item that QuickBooks created is connected to an income account in
fact this income account was also created by QuickBooks specifically to record the income
we earn when we perform the service of managing the customers bounced check because that item is
already there all we have to do was make an item called customer NSF check we have to connect this
item to the bank account so that when we put it on an invoice the invoice will decrease the
bank account by the amount of the bounced check from the main menu click list item list in the
bottom left we click item new the type of item will be other charge the name will be customer
NSF check and the account that we connect it to is cash in Bank you would need one item for each
bank account that the customers could possibly bounce a check in when you give a sale receipt
click OK and we notice this item is now on the items list as another charge connected to cash
and bank now we are ready to record a customer NSF check when a customer bounces a check from a
sale receipt for example let's imagine on March 29 we got a notice from the bank that Betty's check
number 9 583 that was deposited on March 23rd bounced now again the quickest and best way to
see exactly which transaction caused the problem is to open the deposit detail we open the deposit
detail and we find the March 23rd deposit you would have to scroll down okay here's the March
23rd deposit and we don't know yet exactly which sale receipt it's on but we know it's from the
March 23rd deposit and we know its customer Betty so we can see from this list there's only three
items that were deposited from Betty all three were sales receipts on March 23rd let's check
this one nope that is not the right check number let's check this one aha there's no check number
at all she gave cash so it must be sale receipt number for sale receipt number 4 had the check
that Betty bounced notice in the ribbon of the sale receipt window there is no bounced check
tool so there is no way we can put an indication on this receipt that this particular check bounced
so what changed in our records when Betty's check bounced well when her check bounced the
bank account balance decreased by the bounced check the bank account balance also decreased
by the amount of the fee that the bank charged us for Betty's bounced check the customer now
owes us the amount of the check plus the bank fee so that also has to be reflected in our accounts
receivable records and the customer now owes us for a service charge for us to manage their
bounced check so those are the things we have to change in our records when we find out that Betty
bounced a check so what must we do to correct our records well we have to decrease our bank
balance by the amount of the check and the fee we have to charge the customer a fee for our
time and effort regarding the bounced check and usually this is more than the fee that the bank
charges us then we have to build the customer for the bounced check in the fee now how do we
do all these three things very simple just make an invoice for that customer and put both of the
items from the items list on that invoice that's it it is that simple we open the invoice window
and we put the date that the bank decreased our account for the bounced check in this case it's
March 29 we choose customer Betty and the first item we put in the invoice is the new item we
created customer NSF check then we put the money amount of the check push tab now we use the same
item to decrease the account by the fee so we again put customer NSF check then we put
the money amount of the fee that the bank charged so now we bill the customer for the money amount
of the check plus the money amount of the fee the bank charged us which is a total of three
thousand nine hundred twenty and that's the amount our bank decreased our account on the first row we
put the check number that the in the description column so the customer will know which check it
was cheque number and I happen to remember it was nine five eight three on the next row you
explained to the customer that this was the bank fee charged to us or any words that explains it
to the customer on the third row you should put the fee that QuickBooks automatically put on the
list bounced check charge this is what we are asking the customer to pay us for the service
of the time and the energy we spent so the total the customer has to pay is three thousand nine
hundred fifty five dollars the bank account will be decreased by the check amount and the fee and
the customer will understand what they're paying for and then of course we will earn an additional
thirty five dollars in income for managing this bounced cheque click Save and close ignore all
the spelling problems now congratulations you have now corrected your records for the
customers bounced check and all you have to do is print and mail the invoice now let's check
if the invoice we just made fixed our QuickBooks records first the bank balance should be decreased
by the amount of the check and the fee when we open the trial balance we can double click the
account cash and bank and look at the very bottom we see at the very bottom of cash and bank there
was an invoice on March 29th that decreased the bank balance from thirty seven thousand to thirty
three thousand for approximately the amount of the bounced check so we did fix our bank balance
so it will match the bank what about our accounts receivable records well the invoice that we made
recorded what the customer now owes us when we take a look at the open invoice report and look
at the bottom section of Betty we see that this invoice that we just recorded for the amount of
the bounced cheque and the two fees increased Betty's balance by three thousand nine hundred
and fifty-five dollars what about the general ledger and the trial balance is that corrected
well the customer was charged a fee for our time and effort regarding the bounced check
and we did earn income from this when we open the trial balance we can see the income account
returned check charges has increased to $70 when we open it up we can see that this invoice was the
previous video where we use the bounced check tool and charged $35 to candy this invoice on
the 29th is the one that we just made where we earned $35 an income from Betty for managing
Betty's bounced check now we earned a total of 70 dollars for managing customers bounced checks