When a customer’s payment is returned due to NSF (Non-Sufficient Funds) and the applicable Bank Statement has NOT yet been reconciled, a Negative Payment Batch should be created to reverse the original payment.
Using a Negative Payment Batch preserves the history of both the original payment and the NSF reversal on the Customer Account. This provides a clear audit trail showing that the payment was originally received and later returned by the bank.
Do not delete the original payment. Deleting the payment removes the payment history from the Customer Account and does not provide a clear record of the returned payment
Creating a Negative Payment Batch allows you to:
- Reverse the original customer payment.
- Restore the balance to the Customer Account.
- Maintain a record of the original payment and NSF reversal.
- Provide a clear transaction history for future reference and reconciliation
If the check has been reconciled on your bank statement, you would not use the Negative Payment Batch process. Please refer to Accounts Receivable < Payment Processing < How to Process a CustomerPayment Due to NSF that Has Been Reconciled.
Creating a Negative Payment Batch:
1. Under the Accounts Receivable Module select Payment Processing.
2. Select New to create the Negative Payment Batch.
3. When the New Batch form displays, enter the following information:
- Batch Date: Enter the date the negative payment is effective.
- Description: Enter description to identify the Negative Payment Batch.
- Tape Total: This amount will be entered as a Negative amount.
4. Once you click Save, “Reversal Payment Batch” will then be displayed in red at the bottom of the form.
Entering the Negative Payment Batch:
1. On the Payment Processing Screen double-click on the Negative Payment Batch to begin reversing the payment.
2. Enter the Customer Number, the Negative Payment Amount and the original check number, ACH or EFT.
3. Enter a Memo referencing this is an NSF/Returned Check. This will show on the Check Reversal under Payments on the Customer Account.
4. Under Invoices – all paid or partially paid invoices will be listed. Locate the invoice that was originally paid and needs to be reversed and enter the Negative Payment Amount in the Payment field.
5. Click Save. This will bring you back to the Payment Processing Screen.
Depositing the Negative Payment Batch:
1. On the Payment Processing Screen, click the Negative Payment Batch as Ready for Deposit.
2. A Pop-up message will appear asking if you want to change the status of the Negative Payment Batch, Click Yes.
3. Click the Deposit Button.
4. The Deposit Screen will open and continue through the process – enter the Deposit date, Branch, Bank account and Deposit description (optional) and then select the Deposit and Click Save.
Customer Account:
The payment will now show as reversed on the customer account under Payment History and the Memo referencing the Returned Check will be visible.
