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Handling an NSF cheque from a customer

Problem Details:

A cheque from a customer was returned NSF and there was a bank fee because of it. How do I post it?

 

Solution:

To handle a cheque returned by the bank as NSF do the following:

  1. Reverse the cheque in Bank Services -> Bank Transactions -> Reverse Transactions. Select Accounts Receivable and the Customer Number then find the cheque. Click Post to reverse the cheque in AR, Bank and GL and reinstate the invoice.

  2. Do a Bank Entry for the NSF Fee. This will probably be posted to the Bank Charges account.

  3. Optionally, to recover the amount from the customer, create an AR Debit Note applied against the same invoice. Include the NSF Fee (coded to bank charges account) and any processing/handling fee. This will increase the amount of the outstanding invoice.

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