When your bank returns a Customer’s Check due to NSF funds the best way to handle this is to re-open the Invoice on the Customer Account. This should be done through the Cash Receipts System. This process will show the Customers Invoices as un-paid and it will also take the funds out of your bank account. In the Accounts Receivable System choose Cash Receipts System.
You will enter a deposit in Enter & Edit Deposits and put in the negative (-) deposit amount. Below is the menu path.
Accounts Receivable System
Cash Receipts System
Enter & Edit Deposit
The screen below is the Enter & Edit Deposit heading screen. Simply press enter for the next numeric deposit number. Enter the date that your bank charged your account back, this way when the bank account is reconciled it will match the system. Enter a negative amount (-)for your deposit amount and leave Pay Customer Invoices set to Yes. In the Reference for GL you can enter a message like NSF check, you will be able to view this message in a GL Transaction Inquiry. Then simply press Esc or Click Ok to go to the next screen. See the example shown below.
The next screen is the Deposit Detail, choose New Line and then enter the Customer and/or Invoice Number. Entering the Invoice Number is optional; if you do this the system will automatically select the Invoice and apply payment to it.
Notice on the screen below the check amount is a negative amount, this transaction will take money out of your checking account. If you enter the original check number that will show in the check history.
If you entered the invoice number on the check detail screen the invoice that you typed in will automatically appear in the customer invoice screen. If you did not type in the customer invoice or if there are multiple invoices you need to open, click on Select Invoice on the right side of the screen under Options. Each invoice that needs to be opened will be paid with the negative check amount which will increase the balance due on the invoice. In the example below the Open Amount on the invoice was 0 and we applied a negative 1,448.21 leaving a balance due.
You can now print your Deposit Edit Report and Update the Deposit as usual. The G/L transaction posting will be a Debit to Accounts Receivable and Credit to Cash.
After you update your deposit, you can view a customer inquiry and see that the invoice is back on that customers account and open for you to receive another payment.