Processing NSF (Returned Check) Payments

This article explains how to process a Non-Sufficient Funds (NSF) or returned check in Acumatica and the impacts on Accounts Receivable (AR), General Ledger (GL), and bank records. When a check is returned, several steps are required to correctly reverse the payment and to ensure AR, GL, and bank balances remain accurate.

Process

Navigation:  Receivables > Transactions > Payments and Applications

1.   Void and Release the Original Payment.

·       Acumatica creates a Voided Payment document with a negative amount.

·       The entries to AR and Cash Accounts are fully reversed.

·       The customer’s open AR balance is restored to allow the invoices to be paid again.

NOTE: Voiding the payment does not change the original bank deposit record if it had been deposited.

2.  Record the NSF Fee (if applicable).

·       Navigation: Receivables > Transactions > Invoices and Memos

·       Create a Debit Memo or Invoice for the NSF amount.

·       Enter the transaction detail line to an income account or an offset account for bank charge fees.

 3. Apply the Replacement Payment.

·       Enter a new AR payment.

·       Apply it to the open invoices.

·       Include the payment in a new bank deposit following standard procedures.

Impact on Bank Deposits

Original Deposit

·       The original deposit remains unchanged.

·       It reflects what was actually deposited when the payment was assumed valid.

NSF/VOID Reversal

·       The voided payment will

o   Create an entry directly to increase the Accounts Receivable account.

o   Create an offset to the final Cash Account associated to your bank that returned the funds.

Bank Reconciliation Handling

·       The original deposit clears as expected.

·       The returned check appears as a disbursement/negative bank transaction.

·       Match the disbursement to the voided payment entry.

·       The reconciliation net effect aligns with the bank statement.