Voiding / Reversing AR payment tied to released deposit

Question

Hi Community,

I am in need of some help. We are currently booking some AR payments into a clearing account and then using the Bank Deposit feature to transfer those funds to the final bank account. However, we’ve found a couple instances where a payment that’s part of a bank deposit is returned. We would normally void the payment.

How should we go about recognizing the returned payment since we shouldn’t be voiding payments that are part of a released deposit?

We also need to be able to select the returned payment in the Process Bank Transactions for matching.

Appreciate any insight.

Thanks.

valentynbeznosiuk · Accepted Answer

Hi ​@jenniferquinaDon't void it. That's part of a released deposit, and voiding will throw off the clearing account balance for every other payment in that deposit. Also, once a payment is voided, there's no way to undo it.I'd suggest creating an AR Debit Memo, but on the line, swap the revenue account for the actual bank cash account (not the clearing account, since that's already zeroed out by the deposit). That gives you Debit AR / Credit Cash: money leaves the bank, and the customer owes it again.This also solves your second issue automatically. Since it posts straight to the real cash account, it'll show up as a normal transaction in Process Bank Transactions, so you can match it against the return line on your statement.Then, on the original payment, reverse the application to the original invoice and release it. Apply that payment to the newly created Debit Memo. This reopens the original invoice and closes out the Debit Memo and Payment, leaving you to handle the original invoice as usual.

jenniferquina · Answer

Hi ​@jenniferquinaDon't void it. That's part of a released deposit, and voiding will throw off the clearing account balance for every other payment in that deposit. Also, once a payment is voided, there's no way to undo it.I'd suggest creating an AR Debit Memo, but on the line, swap the revenue account for the actual bank cash account (not the clearing account, since that's already zeroed out by the deposit). That gives you Debit AR / Credit Cash: money leaves the bank, and the customer owes it again.This also solves your second issue automatically. Since it posts straight to the real cash account, it'll show up as a normal transaction in Process Bank Transactions, so you can match it against the return line on your statement.Then, on the original payment, reverse the application to the original invoice and release it. Apply that payment to the newly created Debit Memo. This reopens the original invoice and closes out the Debit Memo and Payment, leaving you to handle the original invoice as usual.This worked! thank you for the help!

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