Greetings Jeff!
That’s a great question — and one that comes up often.
When there’s confirmed bank or credit card fraud, I prefer to track those transactions separately rather than mixing them in with normal business expenses. I usually create an “Other Expense” type account called “Bank Fraud.”
Here’s how it works:
- Record the fraudulent charge to the Bank Fraud account.
- When the bank issues the refund or credit, record that deposit or credit back to the same Bank Fraud account.
This keeps the activity together and makes it easy to see if the bank has reimbursed you for every disputed transaction. If the account balance is zero, you know all fraudulent charges have been refunded. If there’s a remaining balance, you know something is still pending.
I recommend this method because it keeps your regular expense accounts clean and provides a clear audit trail in case you ever need to show how the fraud was handled.
– Regina Pitts, Advanced Certified QuickBooks Online ProAdvisor
