A common reason for voiding checks is to eliminate older, stale-dated, outstanding checks. There are two ways that these checks can be voided when using QuickBooks. However, depending upon which method you use, you may unintentionally alter your financial reports. One way to write off checks is to select the check in the register and void it through the “Edit” menu, clicking on “Void Check.” Voiding a check changes the dollar amount to $0 but keeps the empty transaction. However, when the “Void Check” function is used, QuickBooks also zeros all of your accounts or balances that this check affected in the prior period, as if the check never existed. While this does eliminate the check from the list of outstanding checks on the bank reconciliation, various problems can occur, especially if the check is from a prior fiscal year. Since the check amount is now $0, your checking account balance is increased as of the date the check was originally issued, and thus last year’s balance will not agree with your previous bank reconciliations, financial statements, or tax filings. Similar problems will occur if you are doing monthly or quarterly reports and the check was issued in a previous month or quarter.

Unless you are voiding a check in the same month it was issued, the better way to void a check is to enter a journal entry. The journal entry can be made through the “Company” menu and “Make General Journal Entries.” Use a date after your last bank reconciliation was completed. If the check being written off was issued in a prior year, debit (increase) the checking account from which the check was originally issued and credit miscellaneous income. If voiding a check written in the same fiscal year, you would again debit the checking account, but you can credit the original expense account to which the check was posted when issued.

In the “Memo” section for both the debit and credit entries, write the date that the check was originally issued and the check number being voided. If you utilize the class field functionality, make sure you use the same category as was originally used. We recommend that you go into the original check and note in the check memo field that the check is voided, the date of the journal entry and journal entry number. During the next bank reconciliation, you would mark as cleared both the journal entry listed as a deposit and the original check from the list of outstanding checks.

In general, for checks entered against expense accounts, we recommend using the “Journal Entry” method to avoid throwing your reports off balance. Voiding a payroll check or a payment of a payroll liability requires slightly more involved procedures. If you need assistance with voiding checks or any other QuickBooks function, please let us know.