How to Handle NSF Checks

When you receive a customer check that bounces, it's called an "NSF" check (short for Non Sufficient Funds). Here's how to handle this situation.

Do the following two things to record this event in the system:

1. Reverse the payment . . .

Enter the NSF check amount in a payment batch as a negative dollar amount. This will reverse the original invoice and will result in two entries in the customer account -- one positive (the original invoice amount) and one negative (this reversing entry). The total of these two entries must be zero.

2. Record the NSF charge . . .

Create a Service Product called "NSF Charge" (if you don't already have one). Enter the NSF charge amount (NOT the check amount) in an invoice batch for this customer using this product. This will create an entry for the charge amount that will show up on the customers next statement.