banking

How do I handle bounced check in Zoho Books?

You can create an account for dishonoured payment under the type Other Current Liability to track the amount coming in and going out due to check returns.

For the “Money In” transaction you can record as a deposit from the dishonoured payment account. And for the “Money Out” transaction, you can record an expense and associate the dishonoured payment as the Expense Account. So, you would be able to tally the transactions.

Please follow the instructions below in this regard:

  • Navigate to Accountant -> Chart of Accounts.
  • Click on the + New Account button present at the top of the page.
  • Enter the Account Name, for example DISHONOURED PAYMENT and, set the Account Type as Other Current Liability.
  • Click on Save.

After adding a new account, follow the steps to record a deposit for the statement:

  • Go to Banking tab and select the specific bank which has the transaction.
  • Click on Add Transaction and select Other Deposit from the drop-down.
  • Choose the From Account as “DISHONOURED PAYMENT”.
  • Enter all the other relevant information such as the Amount, Date and if necessary, associate the customer.
  • Click on Save.

After recording the deposit, to record an expense, follow the steps listed below:

  • Click on Add Transaction and select Expense from the drop-down.
  • Select DISHONOURED PAYMENT from the Expense Account field.
  • Enter all the other relevant information such as the Amount, Date and if necessary, associate the customer.
  • Click on Save.

By doing this, you will be able to track the Money In and Money Out. So, it would tally the accounts in Zoho Books.

Note: If you have recorded payments with the check, you have to delete those payments.

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