How to handle Customer's Bounced check in Quickbooks | Handling Customer NSF check

Handling Customer NSF check:

You need to take the monies out of your checking account and also put it back on the customer's account to show that they still owe you. The best way to handle it is as follows:

• Create an Other Charge Item called Bounced Check or NSF. In the description field 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
• You can also create an Other Charge Item called NSF Fee and charge the customer for any service charge received from the 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 you receive a replacement check from the customer, Receive Payment as usual and make your deposit.

Contributed by Sumathi

http://www.outsourcequickbooks.com/

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