when entering a return check what item should i pick from the “account” list.
what i did was i clicked the “spend money” and wrote return check for “payee” the check number for “description” since this has nothing to do with the “item” i ignored this field and i got stuck at selecting “Account”.
Just use the same Account as when you received the check:
Accounts Receivable + Customer + Invoice
- this will put a balance back against the Customer, make the invoice unpaid
The solution you’ve provided is the correct method if i’m receiving checks from the customers.
The problem is there are two different businesses that i run and both the businesses get mostly checks, what i normally do is pool all the checks as one and deposit them to respective accounts according to the payments the banks need so at times there are checks that does not relate to the customer, and times like these some checks that (doesn`t relate to the customer) get dishonoured/returned due to insuffient funds etc.
what i’d like to do is debit the return check sum from the bank account but I once again face the issue of relating an account to it.
@Premm, you may have created a mess for yourself by mingling receipts for two different businesses. If these are two distinct legal entities, you must have separate accounting records. You have created an apparent situation with intercompany loans, which is a much larger issue than a dishonored check.
So you are talking about checks from “cash” sales, not customer invoicing.
Therefore the checks when being deposited would be allocated to sales per the respective business, so if one gets returned you could bank it back to sales.
However, if you are going to be chasing up theses returned checks for payment then you could create an Asset account call Returned Check Clearing, deposit them there and then that account is available for reconciling…
Exactly! A selective few like you mentioned are from existing customers of the business and those check i have done the way you have advised. it was those checks that were not relating to customers that i had problem with and yes i will need to recover the payments for the checks and that was my next question and you answered me before i asked, thanks a million man!
it was a mess until i found “Manager”. Now i’m trying to weed out minor issues.
I do have not two but four separate legal entities and all the accounts are now being separated but the only problem is when it comes to collection, i get about 75 checks average, the last thing i want to do is segregate the checks according to the businesses end of day.
What I do is i account the receivables according to the customer/business and when banking i deposit amounts that the bank needs (to realise the checks as per the payments I’ve made in checks) to the four different accounts i have for the four businesses.
in short, @Brucanna understood exactly my position and hit the nail!
Anyways thanks for your feedback