Regardless of which accounting software you are using you will want to follow some basic bookkeeping principles when dealing with these 2 events!

Returned checks. When the bank notifies you that it is returning a customer’s check for NSF (not sufficient funds), debit the customer’s account immediately—even if you plan to redeposit the check the same day. For good internal controls, instruct your bank to address all returned checks to someone other than you—possibly the owner or a senior manager. This can protect you if an employee tries to use fictitious checks to cover temporary shortages.

·         In QuickBooks

o   You will need to have 2 Other Charge Items in your Items list

§  Bad Check – linked to your bank account

§  Bank Charge – linked to your bank service charges expense account

o   Create an INVOICE for the check and the amount you want the customer to pay for the bank charges

o   When payment is received; either the same check for redeposit or a new check in the future, you will receive the payment against the invoice and deposit to the bank in the normal way

o   Finally you will need to enter the service charge, if any, charged to your account into the appropriate bank account

·         In MAS 90/200

o   You could actually follow the outline above and Invoice for the NSF check thru the Accounts Receivable Module, using Misc. Chg. Codes for the Bad Check and Bank Charges, however . . . .

o   The recommended method is to post negative cash receipts and reopen the invoice so that you can see the payment and the reversal of the payment clearly in the customer’s history on the Invoices or Transactions tab.  To do thisUse this procedure to record a customer's bounced check and to make the appropriate posting for a reduction in cash, to increase the balance owed on the customer’s account, and to reinstate the invoice.

§  Select Accounts Receivable Main menu > Cash Receipts Entry. The Cash Receipts Deposit Entry window automatically appears.

§  In the Cash Receipts Deposit window, enter the Deposit Number, Description, Bank Code, and Deposit Date fields.

§  At the Cash Deposit Amount field, type the amount of the check as a negative number, and click Accept. The Cash Receipts Entry window appears.

§  In the Cash Receipts Entry window, enter the Customer No. and Check No. fields. For more information, see Cash Receipts Entry - Fields.

§  At the Deposit Type field, select Cash.

§  At the Amount Received field, type the amount of the check as a negative number, and then click the Lines tab.

§  At the Invoice No. field, enter the invoice to be reinstated.

§  At the Amount Posted field, type the amount of the invoice as a negative number, and click OK.

§  Click Accept, and then click the Printer button to print and update the Cash Receipts Journal and Daily Transaction Register.

Postdated checks. If a customer gives you postdated checks, treat them as a note receivable. In other words, debit it to Notes Receivable, not to Cash. On the date written on the check, deposit it to your firm’s account, debiting Cash and crediting Notes Receivable.

·         In QuickBooks

• Setup a Notes Receivable account as an Other Current Asset account
• On the day the postdated check is received
  • Receive Payments to apply to the customer’s invoice(s)
  • “Deposit” the payment into the Notes Receivable account
• On the day the check is ready to deposit to the bank
  • Go to the Make Deposits window
    • You can add the check to other checks currently waiting to be deposited by adding a line to the end of the deposit
      • Be sure to select the Customer in the Received From column so you can see the final transaction in the Customer Center
      • Select the Notes Receivable account in the From Account drop down
      • Complete the rest of the line
    • Or you can deposit it separately by not selecting any other customer payments and entering, as above, in the blank Make Deposits window
• In MAS 90/200
  • Setup a Notes Receivable account in the Chart of Accounts
  • Setup a Bank Code tied to the Notes Receivable account and enter “post dated checks” as the description
  • Follow the normal Cash Receipts posting and Deposit to the new bank code
  • When the date comes to deposit the check into the bank
    • Create a separate deposit slip for the check
    • Create a General Ledger Transaction Journal Entry
      • Open the Format button
      • Edit the Header Defaults to record the Notes Receivable account in the Offset Account No. field and the Offset as a Credit
      • Select Bank Transfer as the Transaction Type
      • In the Bank Reconciliation Options area;
        • Select the Bank Code tied to the Notes Receivable account
        • Enter the Transfer Funds to Bank Code
      • Click OK
    • On the Header tab; enter the deposit date, a journal comment if desired and a document reference number in the Transfer No box
    • On the Line tab you will see your preselected Bank Code for the deposit; enter a Doc Refer # and fill in the amount of the check and a comment if desired.

Responses[1]

Posted by Dick Coppens on September 15, 2009 1:38:00 AM BST #