A negative cash receipt can be created and applied to the original Billing to record the return of a Non-Sufficient Funds (NSF) check or a credit card chargeback. Before this can be accomplished, two validation rules on the Cash Receipt object may need to be deactivated (if not already deactivated). The two rules that need to be deactivated are:
- Balance Must be Positive
- Cash Receipt Cannot be Negative.
Deactivate a Validation Rule
- Click the Gear icon and select Setup.
- Click the Object Manager tab and search for Cash Receipt.
- Click Validation Rules.
- Select the rule that you want to edit and click Edit.
Note: The ability to edit a Validation rule is based upon your permission level.
- Deselect the Active checkbox.
- Click Save.
Record the Return of a Non-Sufficient Funds Check or Credit Card Chargeback
- Create a new negative Cash Receipt for the amount of the original check or credit card charge.
Note: Enter a negative number in the amount field. You might record "Return of NSF Ck ####" in the Payment Reference field. This will produce an item for clearing during the Bank Reconciliation process.
- Apply the negative Cash Receipt to the original Billing. If the original Billing is paid-in-full, it will no longer be available for selection when selecting the Apply/Unapply button. Instead, you'll need to manually create a "New Billing Cash Receipt" in the related list of the Cash Receipt. By creating the Billing Cash Receipt, you are creating the link between the new (negative) Cash Receipt and the original Billing.
Note: "Applied Accounting Period" should equal the Accounting Period in which the the NSF entry posted to your bank account. You will again enter a negative number in the "Applied Amount" field. Once applied, the original Billing and your AR balance will be adjusted appropriately. Also, verify that the correct Accounting Period is selected. This is the period that the AR balance will open back up.
- Create a Journal Entry to record the bank fees (only the amount your bank charged you for the NSF check). Debit the same GL Revenue Account used on the additional Billing Line and credit the bank account. Once posted, the bank fees will be available during the Bank Reconciliation process. Alternatively, the bank fees could be pulled in as a Cash Disbursement through Bank Direct Connect.
Charge a customer for NSF Fees
To charge a customer for NSF fees you incur, create an additional Billing for the appropriate fees (any NSF fees your bank charged you that you are passing on to your customer plus any additional fees you are charging your customer for the NSF check). Credit a GL Revenue Account for the total fees when entering the Billing Line.