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Sometimes a check from a closed accounting period doesn’t get cashed. Here’s how to handle it, without altering the closed period.

Understand the Void Check Function

When we use the Void Check function, QuickBooks zeros the amount of the check, & also zeros the amount that was used in the lower ½ of the screen. Usually, this is some type of expense. By example, it could be office supplies, auto expenses, or some other type of expense.

If we void a check from a closed period, we alter the closed period. We increase the amount of cash showing on the books, & we increase the amount of profit (if the check was for an expense). Altering closed periods isn’t a good practice & should always be avoided, unless your accountant directs you otherwise.

Don’t Void – Make a Reversing Entry Instead

Remember the old days, when we kept paper check registers? Do you remember what you did when you needed to void a check? You had one of two choices:

• You could cross off the voided check, & readjust the running balance in your register ®
• You could make a reversing entry on today’s date, to “wipe out” the effect of the voided check. This entry looked like a deposit in your register, & did not alter the running balance.

Here’s how to do the latter in QuickBooks:

1. Take Good Notes. Go to the check you want to void. Make a note of the payee, amount, date, number, & expense account. Make a notation on the memo line that explains why you needed to reverse the check, such as: “Check lost in mail. Reversed on MM/DD/YYYY.” MM/DD/YYYY is today’s date, or whichever date in the current period you want to use.

2. Make a Deposit. Go to the Make Deposits screen. Make sure the correct bank acount is chosen, the same one as the check. Enter the appropriate date in the current period. In the top Memo line, enter a notation like this: “Reversal of Ck# 1234 – check lost in mail.”

In the Received From field, enter the payee. In the Account field, enter the expense account used in the original transaction. In the Memo line, enter the same thing as the top memo line. In the Check #, enter the check number. Enter the payment type as Check. Enter the amount. OK. Save the transaction.

If you go straight to the bank account register, you’ll see this as a deposit, & your bank balance will be higher than it was before you made the entry.

Reconcile Your Problem Away

Next time you reconcile this bank account, you’ll see both entries – the original entry on the left side of the screen, the reversing entry on the right. Be sure to select them both to be reconciled. They will offset each other & not effect the reconciliation.

Why Not Use the General Journal?

Some people might suggest to use a General Journal Entry in this situation, but I think it is better to use the Make Deposits screen. This screen allows you to enter the check number in it is own field.

This is important. In the future, somebody might need to search for this check number. When this happens, both entries will show in the search results, the original & the reversal. Using the General Journal will not produce the same results in a search for this check number.

Final Thoughts

These instructions are for straightforward check entries, the type that are designated CHK in the check register. They do not necessarily apply if the check was a bill payment check (designated BILLPMT in the register), a payroll check (designated PAYCHK in the register), or some type of tax payment check (designated LIABCHK or TAXPMT in the register). If you really need to void or reverse one of these, or a payroll check that was not generated by QuickBooks, please consult with a QuickBooks or accounting professional.

About the Author: Jennifer A. Thieme is a Certified QuickBooks ProAdvisor who loves to write about QuickBooks issues. So… She brings completely unique insight, clear instructions, & over ten years of experience to all of her QuickBooks articles. Owner of Solid Rock Accounting Services, Jennifer’s clients enjoy these same benefits on a personal & regular basis. You can too – visit http://www.jenniferthieme.com & contact Jennifer today.

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