1. Enter original Invoice
2. Enter Original Receive Payment
The bank informs you that the check bounced. There it is: Item returned undeposited, and a bank fee, often $12. Figure out who's checked bounced. You need to know which customer/client?
3. Enter an expense using the customers name. Post the expense to "Accounts Recievable".
It'll show up on your Open Invoice report. You'll be able to reconcile your bank account.
4. Go to the Original payment for the original invoice, and uncheck the payment against the invoice. Leave the payment as a credit.
That invoice is now unpaid, which is correct. They still owe you for the original invoice.
5. If you want to pass a fee onto your customer at this point, create a line iten in the Line Item List (Products Items List in QB Online). Your Item name might be "Bounced Check". Your descriptoin might be "Charge for NSF check processing". Your amount is what you want but $35 is the most businesess charge.
6. Go into the original invoice, and add that line item, and charge. Some of my client's don't charge for this so they won't have steps 5 and 6.
The customer gives you a new check/payment.
6. Do a new Receive payment for the new check. Apply the new check to the original invoice by clicking that it's going to pay off the original invoice.
Now in your open invoice report, you'll see the original payment and the expense. They balance to zero. To clear these 2 line items off your report, apply the original payment to the expense.
7. Go into Receive Payment window (as if you're doing a new transaction) and enter the customer in question. That'll pull up both the original payment and the expense. You can click those off against each other so they no longer show up on the open invoice report.
This is natural because you're following the linear steps that happen in the real world. No one likes having a bounced check, especially your customer/client, so be nice about it. This is what it means to have a successful business.