So, you closed your books, your taxes are done, but now you realize a check you wrote in the closed period needs to be voided and re-issued.  What do you do?

Here is how you can void a check in QuickBooks in a closed period:

Step 1:

Find the check in the register that needs to be voided.  Take note of which accounts are being affected. Typically, this will affect expense and bank accounts.  Make a note within the memo that you “voided” the check and re-issued the check, noting the current period date and new check number, by way of a journal entry.  Do NOT actually void the check.  Voiding a check could cause issues if it was used to purchase inventory, or pay a 1099 vendor.

Step 2:

Create a journal entry in the current period, debiting the same bank account and crediting the expense. To create a journal entry in desktop go to Company > Make General Journal Entries.  To create a journal entry in online go to the Create icon > under the Other column click Journal Entry.

Journal Entry Example – Journal date 6/17/2018:

Account

Debit

Credit

Memo/Description

Main Checking $500 JE to Void ck #1001 in 2018; reissued 3/25/2019 w/ ck #2106
Utilities Expense $500

The journal entry will reverse the activity in the current period.  If the check belongs to a 1099 vendor, we recommend using a wash account for the journal entry and re-issued check.  Using a wash account will avoid overstating the amount paid to the 1099 vendor in the current period.

Step 3:

If you need to re-issue a check, write a new check in the current period to the same bank and expense account that you used in the reversing journal entry in Step 2, so it washes in the current period.  Make a note in the memo that it is a re-issued check for the original “voided” check.

For example:  Re-issued ck #1001 from 6/17/2018

Step 4:

When you perform the next reconciliation, the “voided” outstanding check from the closed period and the journal entry reversing the original check in the current period should both be marked as reconciled.  The new check issued in the current period will remain outstanding until cleared.

The net effect is no change to the closed period.  Keep your tax accountant and auditors from asking questions by providing a trail of activity that enables you to clearly identify what happened.

If you have any questions, please contact Chortek using our form and ask for QuickBooks help in the message section!

Stay tuned for Part 2 – How to re-issue a Bill Payment!

Written by Ann Weaver
Posted in Business Advisory