Through the course of business you're likely to encounter a case or two where you received a check from a client which was then returned NSF (Non-Sufficient Funds). If you are using an accounting system such as QuickBooks recording this NSF check and ultimate reduction of your bank account balance can be a little challenging. During this How-To we will look at how to best handle these cases so that everything is recorded properly in Control and QuickBooks.

  • Create a new Asset account in Control named NSF Check
    • Set the External Account Name to your Bank Account Name in QuickBooks. This is done so that when you export into QuickBooks your bank account is immediately reduced by the amount of the NSF check.
  • Create a Payment Method in Control named NSF Check
    • Set the Default Bank Account for the payment method to NSF Check
  • Refund the payment on the order in Control instead of voiding the payment. This is done so that during the refund process I can select to refund from NSF Check. This will cause the export to QuickBooks to post a credit entry to the bank account in QuickBooks.

Creating the NSF Check GL Account

  1. Open Control
  2. Click on Setup | Accounting Setup | Chart of Accounts.
  3. Click on Asset then click the Add button to create a new asset account and use the settings below.
    1. Account Name: NSF Check
    2. Classification Type: Current Asset
    3. External Account Name: Enter the name of the bank account in QuickBooks. i.e. Wells Fargo Checking
  4. Click Save to create the account.

Creating the NSF Check Payment Method

  1. Open Control
  2. Click on Setup | Accounting Setup | Payment Methods
  3. Click the New button to create a new payment method and use the settings below.
    1. Account Name: NSF Check
    2. Description: NSF Check
    3. Group Name: NSF Check
    4. Tender Type: Other
    5. Default Bank Account: NSF Check

Processing the NSF Check Payment (Refund instead of Void)

  1. Open Control
  2. Open the Order Explorer
  3. Locate the order you wish to refund the payment on, keep in mind that a refund and void result in the same net accounting effect. We're simply refunding because we need to refund against a different payment method than the method we received for the payment.
  4. Right-click on the order in the Order Explorer and choose Order Options | Give Refund.

Note: If the order is in a status of Closed, you have to change it to a status of Sale to see the option to Give Refund.

  1. Process the refund using the information below.
    1. Refund Amount: Enter the amount of the NSF Check
    2. Payment Account: Select the NSF Check payment method.
    3. Reason: NSF Check
  2. Click OK to process the refund.

Exporting to QuickBooks

  1. Export to QuickBooks at the end of your day using the standard daily closeout process.
  2. When you import into QuickBooks you should notice the balance of your bank account has been reduced by the amount of the NSF check.

Contributor: Brandon R, Cyrious Software, Inc.

Date: 5/27/2011

Version: Control

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