Handling Bounced Cheques from Customers

We’ve had clients in the past who wanted to know how to handle customer cheques that bounce. Here’s how we suggest handling this situation:

1. Record the service charge that the bank charges you for handling the returned cheque, just like any other bank service charge.

You can record the bank service fee as though it’s a cheque that you just wrote (and use the “E” VAT Code). Remember, anything coming out of your bank account is entered like a cheque.

2. Record the bounced cheque as a decrease to your bank account balance.

In the Write Cheques window, enter the following information (see Figure 8-8):

• Choose the customer’s name in the Payee field.

• Enter something such as ReturnedChq in the No. field.