Step 1: Enter a reversing journal entry

1. From the Company menu, select Make General Journal Entries.
2. Make sure the Date and Entry No are correct.
3. Debit the chequing account for the amount of the Returned payment.
4. Credit the A/P account for the amount of the returned payment.
5. Enter the Supplier name.
6. (Optional) Enter memos and classes.
7. Select Save & Close.

Step 2: Un-link the bill from the payment cheque and link it to the journal entry

1. Open the original bill payment cheque.
2. Uncheck the bill(s) originally paid by the bill payment cheque.
3. Check the Journal Entry created in Step 1.
4. Enter a Memo to indicate what the payment was returned for.
5. Select Save & Close.

Step 3: Enter a bill for the bank fees

Do this step ONLY if the supplier charges you bank fees.

1. From the Suppliers menu, select Enter Bills.
2. Enter the Supplier name.
3. On either the Expenses Tab or the Item Tab, enter the bank charges with the appropriate account or item.
4. Enter a Memo to indicate that these are charges for the returned bill payment.
5. Select Save & Close.

Step 4: Create a new bill payment cheque

Since you un-link the original bill payment cheque from the bill(s), they were marked unpaid and should re-appear in the Pay Bills window.

1. From the Suppliers menu, select Pay Bills.
2. Select the bill(s) originally paid by the NSF bill payment cheque and the bill for overdraft charge (if applicable).
3. Complete all other required information.
4. Select Pay Selected Bills.