Handling Nsf Check Payment

Document Version	v.3
Document Last Updated	7/9/2024
Software Version Documented	v.9.9.2

Task/Problem Overview

This article will go through the process of handing when you receive a check payment from the customer that comes back as an NSF (Non-Sufficient Funds)

Scenario 1: General Ledger Entry (You will never receive payment)

In the scenario that you received a bounced check from a customer and it is apparent that you will not receive the actual funds it is considered as a loss and a General Ledger entry will need to be created.

Creating a General Ledger entry go to Accounting > Accounting Manager

Next select Ledger

Since you’ve already deposited the check as part of your end of day process your GL will reflect that you received the funds for this payment. Since the check came back as an NSF you will need to do a credit entry against your bank account ledger.
Locate your checking account on your ledger and right-click
Select ‘ Make General Ledger Entry’
Verify you have the correct checking account and warehouse and in the Credit field, enter the amount of the check. In the Transaction Ref# enter NSF and check number for reference.
Next select an Expense Account you want to debit against.
Finally, save and close the entry. If you do receive money in the future, this will need to be voided and the following steps will need to be implemented.

Scenario 2: Creating NSF Payment Type (The customer will reissue a payment for the NSF check)

Create the New Payment Type

Create a new payment type called ‘NSF Write Off’. Go to Admin> Administrator
Next select ‘Payment Types’

Select ‘New’ to create the payment type. Enter the Payment type as ‘NSF -Write Off’ and select the appropriate payment, and ledger information (this will be the checking account for your bank deposits) and select ‘Add’

Reverting The Payment Using NSF Refund Type

After you’ve created the new payment type you will now create a refund for that customer using that new payment type.
Find each invoice paid with that NSF check, go to the shipper and click Refund.
In the Refund Money screen, choose “NSF - Write Off” then click Issue Refund.
Then go to Record deposits and record the deposit for the negative amount of the NSF check. This will be used to reconcile your bank statement.
When the replacement payment arrives, proceed with the normal accounting procedures as these invoices will be open for receiving payment now.

NOTE: If a deposit is taken on the order it will not show the refund button on the shipper or if a shipment has not happened yet for scenario #2 the Refund needs to be done from the Summary tab of the order.

For scenario #2, if the deposit is applied to the shipper(s) the deposit will need to be adjusted out by clicking on the “...” next to Deposit Applied from each shipper and applying the 0 value before you can issue the refund for the NSF Write Off from the Order Summary tab