Handling Returned Checks

When a bank returns a check because of nonsufficient (NSF) funds, you need to reduce the balance of your checking account and adjust the customer’s balance. If your bank penalizes you for taking an NSF check, you also need deduct the amount of that fee from your checking account.

If you decide to recover your losses by charging the customer a fee for the returned check, you also need to record the fee in the customer’s accounts-receivable ledger. This entry, along with the adjustment made to the customer’s balance, will appear on the customer’s next statement (if the customer hasn’t paid you by the time you generate statements).

Note: To generate a statement for a customer, the Statement check box needs to be selected on the Customer Maintenance screen of that customer’s record.

Recording a Returned Check
Charging Customers Returned Check Fees
Recording Bank Fees for Returned Checks