When a customer's check is returned by the bank due to insufficient funds, two things need to happen in CRO Billing. First, the original payment that was recorded when the check came in needs to be reversed, since those funds never actually cleared. Second, create a debit memo to charge the NSF fee back to the customer's account. This guide covers the debit memo step. The payment reversal step may involve your accounting software or administrator depending on how your company handles it.
Before You Start
⚠️ Warning: Do not create the NSF debit memo until you have confirmed with your bank that the check was returned. Creating a debit memo before the return is confirmed adds a charge to the customer's account prematurely and may require correction later.
Contact your administrator or accountant about reversing the original payment in CRO Billing before or alongside creating the NSF debit memo. Both steps are needed to keep your records accurate.
Steps
1. Go to Debit Memos. Click Debit Memos in the left sidebar.
2. Open the debit memo creation form. Click the New Debit Memo button in the toolbar.
3. Set the DM Type to NSF. In the Memo Details section, open the DM Type dropdown and select NSF. This categorizes the memo correctly and ensures it appears when you apply the NSF/Bounce filter on the Open Debit Memos tab.
📸 Screenshot suggestion: The Create Debit Memo modal with the DM Type dropdown open showing NSF selected.
4. Fill in the memo details.
Complete the following fields:
Issue Date — The date the bank notified you of the returned check, or the date you are recording the fee
Amount — The NSF fee amount you are charging the customer. This is typically your company's standard NSF fee, not the original check amount
Comments — Note the original check number, the check date, and the amount of the returned check. This makes it easy to trace the NSF back to the original payment later
📸 Screenshot suggestion: The Create Debit Memo modal with the NSF type selected, the Amount field filled in, and the Comments field showing a note referencing the original check number and amount.
💡 Note: The NSF fee you charge the customer is separate from the original check amount. The debit memo records only the fee. The reversal of the original payment—which removes the credit applied to the customer's invoices when the check was deposited—is handled separately.
5. Add a line item for the fee (optional but recommended). Click Add line item and use Free-form entry to add a row with a clear description such as "NSF Fee — Returned Check #[number]" and the fee amount. This makes the charge transparent and easy to reference if the customer questions it.
6. Save the debit memo. Click Save. The NSF debit memo appears in the Open Debit Memos list and in the customer's account history.
Verifying the NSF Entry
After saving, go to the Open Debit Memos tab and click the NSF/Bounce KPI card at the top of the page. This filters the list to show only NSF-type memos. Confirm your new entry appears correctly with the right customer, amount, and date.
📸 Screenshot suggestion: The Open Debit Memos tab with the NSF/Bounce KPI card highlighted and the filtered list below showing only NSF-type debit memos.
What to Do Next
Once the NSF debit memo is in place, the customer's account will reflect the additional fee. When the customer sends a replacement payment, record it as a new payment and apply it to both the original open invoice (if it was unapplied when the check bounced) and the NSF debit memo balance.
If you are unsure whether the original payment was reversed correctly after the bounce, check the customer's payment list in Receivables and confirm the payment shows an open balance equal to the original check amount. If it was applied to invoices before the bounce was discovered, those invoices may now show as open again — contact your administrator if this is not the case.