- Created by admin, last modified by AdrianC on May 06, 2016
https://help.myob.com/wiki/x/mgec
ANSWER ID:9078
Accounting for a dishonoured or "bounced" cheque is as simple as recording a withdrawal, but additional steps are required if the cheque was deposited using the Prepare Bank Deposit function.
If the dishonoured cheque was a deposit payment, see Customer deposits.
On your bank statement, a dishonoured customer cheque will be represented as a withdrawal from your cheque account. This withdrawal is easily recorded in your software by simply reversing the customer payment.
Task 1: Set the security preference
The ability to reverse or delete transactions is determined by a security preference. To set this preference for reversing transactions:
- Go to the Setup menu and choose Preferences.
- Click the Security tab.
- Select the Transactions Can't Be Changed; They Must Be Reversed option.
- Click OK.
Task 2: Locate the transaction
- Go to the Accounts command centre and click Transaction Journal.
- Click the Receipts tab.
- Enter the date of the customer payment in the Dated From and To date fields, then press the key on your keyboard to display the search results.
- Identify the customer payment to be reversed.
Task 3: Reverse the transaction
- Open the transaction located in the previous task by clicking on its zoom arrow.
- Go to the Edit menu and choose Reverse Payment. If you can only see the option to Delete Payment, see Task 1 above.
- Once the transaction has been reversed, check the transaction details then click Record.
The window below shows the reversing of a Receive Payment transaction.
Note the negative amounts. This will result in a withdrawal from your cheque account, which will coincide with your bank statement. By reversing the Customer Payment, the invoice it was applied to will be returned to Open. Use Receive Payments to record any new payments.
The window below shows the reversing of an example Receive Money transaction.
Note the negative amounts. This will result in a withdrawal from your cheque account, which will coincide with your bank statement.
FAQs
After recording the reversal, open Prepare Bank Deposit, select the reversal then click Record.
The window below shows a reversal in the Prepare Bank Deposit window. Note that the Amount is a negative value which will result in a withdrawal rather than a deposit.
It is customary that the customer reimburse the supplier for the bank fees associated with a dishonoured cheque.
Here's what's involved:
Task 1: Record the dishonour fee
The dishonour fee will appear on your bank statement and is entered using Spend Money. Open Spend Money, change the Cheque No to Fee and allocate the transaction to your bank fees expense (6-xxxx) ledger account.
This will result in a debit posting to the expense account.
Task 2: Record the reimbursement
The reimbursement can be entered using one of the following methods - both of which will result in a credit posting to the expense account, which will offset the debit posting recorded in Task 1:
Receive Money: Open Receive Money and allocate the receipt to the same expense account used to record the dishonoured cheque fee.
Receive Payments: Create a sales invoice for the customer, allocating it to the same expense account used to record the dishonoured cheque fee. Open Receive Payments and apply the payment to the invoice.
Australia only
Usually this will only affect you if you report your BAS on a cash basis, but the reversal needs to be dated in the current BAS reporting period, resulting in an adjustment in that period. When the customer reissues the payment, it too needs to be recorded and reported in the current period, and will offset the reversal.
If you report your GST on an accruals basis, you will only be required to adjust the GST if the sale is to be written off as a bad debt. For information on writing off bad debts, please refer to Writing off bad debts.
New Zealand only
Usually, this will only affect you if you report your GST on a payment basis, but the reversal needs to be dated in the current GST reporting period, resulting in an adjustment in that period. When the customer reissues the payment, it too needs to be recorded and reported in the current period, and will offset the reversal.
If you report your GST on an invoice basis, you will only be required to adjust the GST if the sale is to be written off as a bad debt. For information on writing off bad debts, please refer to Writing off bad debts.