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# My customer paid for an invoice using a cheque but the cheque bounced. How do I record bounced cheques in Zoho Books?

If your customers pay for invoices using cheques, there is a possibility that the cheques may bounce. To record bounced cheques in Zoho Books, you can create an account (say Dishonored Payment), under the type _Other Current Liability_.

For the Money In transaction, you can record a deposit to the _Dishonored Payment_ account and for the Money Out transaction, you can record an _expense_.

To create an account for dishonored payments:

*   Go to the _Accountant_ module on the left sidebar and select **Chart of Accounts**.
*   Click **\+ New Account** on the top right corner of the page.
*   Enter the **Account Name** (_Dishonored Payments_ in this case) and select the _Account Type_ as **Other Current Liability**.
*   Enter the **Account Code** and write a short description for the account, if required.
*   Click **Save**.

![Account for Dishonored Payments](/books/kb/images/banking/dishonored-payments-account.png)

A new account will be created. Next, you can record a deposit. Here’s how:

*   Go to the _Banking_ module on the left sidebar and select the bank account in which you want to record the transaction.
*   Click _Add Transaction_ and select **Deposit From Other Accounts** under _Money In_.

![Select Deposit From Other Accounts under Money In](/books/kb/images/banking/money-in-dropdown.png)

*   In the pane that appears, choose the _From Account_ as **Dishonored Payment**.
*   Fill in details in the mandatory fields like **Date** and **Amount**.
*   Click **Save**.

![Deposit From Other Accounts](/books/kb/images/banking/deposit-from-other-accounts.png)

Next, record an expense. Here’s how:

*   On the same page, click **Add Transaction** and select **Expense** under _Money Out_.

![Select Expense under Money Out](/books/kb/images/banking/money-out-dropdown.png)

*   In the pane that appears, choose the _Expense Account_ as **Dishonored Payment**.
*   Fill in the details of mandatory fields like _Amount, Date,_ and _Invoice Number_.
*   Click **Save**.

![Record an expense](/books/kb/images/banking/expense.png)

**Note:** If you had recorded payments with the cheque, you will have to delete those payments as the cheque was dishonored and the payment recorded via the cheque is no longer valid. After you delete the recorded payment, the status of the invoice will be updated to **Overdue** or **Sent**. Also, this ensures that there are no discrepancies in your company’s financial records.

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