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ANSWER ID:9245

If an individual portion of an electronic payment is rejected by the receiving bank, a reversal is needed to deposit the funds back into your AccountEdge bank account. This deposit will correspond to the rejected payment on your bank statement. It will also place your accounts in the position they were in before the payment was recorded.

The same principles and steps can be used for rejected Pay Bills and Spend Money payments.

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Example

You process an electronic payment to one of your suppliers (Clear & Bright Filters). The bank processes the electronic payment and on the following day, the receiving bank rejects it due to incorrect banking details. Your bank is then notified and the money is deposited back into your cheque account.

 

Let's step you through how to record this reversal in AccountEdge.

 

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title1. Reverse the individual payment
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Before you begin

To ensure you're able to reverse the payment, go to the Setup menu, choose Preferences, click the Security tab, then select the option Transactions CAN'T be changed; They Must be Reversed. You'll now be able to reverse the payment as described below. Without setting this option, you'll only have the option to delete the payment.

To reverse the payment

  1. Go to the Banking command centre and click Transaction Journal.
  2. Click the Disbursements tab.
  3. Locate the rejected payment. In our example, this would be the Clear & Bright Filters payment.
  4. Click the zoom arrow next to the payment.
  5. When the transaction opens, go to the Edit menu and choose Reverse Transaction.
  6. Check the reversal transaction details and change the Date to the date the payment was rejected by the bank.
  7. Click Record.

After doing this the following will occur:

  • The bill which the payment was applied to will now have an Open status.
  • The reversal will appear in the Prepare Electronic Payments window as a negative amount to be 'paid'.
  • The reversal will have posted a deposit to your Electronic Clearing Account.

The window below shows the journal postings of the original electronic payment (the first transaction in the list for $1000) and the reversal (the last transaction in the list for $1000). Notice that the reversal has posted a deposit (debit) to the Electronic Clearing Account.

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title2. Process the reversal

This task transfers the deposit from the Electronic Clearing Account back into your cheque account.

  1. Go to the Banking command centre and click Prepare Electronic Payments.
  2. Enter the same Date as used for the reversal.
  3. Select the reversal transaction then click OK to the alert which is displayed.
  4. Click Bank File (Australia) or Process (New Zealand).

The window below shows the Prepare Electronic Payments window with the reversal displayed as a negative and selected for processing. When you select this transaction a warning message will appear. Click OK to this warning.

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After processing the reversal, everything is back as it was before you processed the original (rejected) payment.

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<h2><i class="fa fa-comments"></i>&nbsp;&nbsp;FAQs</h2><br>
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titleHow do I enter the replacement payment?

You can enter the replacement payment using the same method used for the original payment. Before reprocessing the payment, make sure you rectify whatever it was the caused the original payment to be rejected. For example, if there were incorrect banking details for the payee, make sure these are corrected before proceeding.

For more information on preparing and processing electronic payments, see the AccountEdge help (Australia | New Zealand).

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titleHow is the cheque account reconciled?

As the reversal transaction is posted as a deposit to your cheque account, it will correspond with the rejected payment on your bank statement. The replacement payment, being a withdrawal, will also correspond with the bank statement, so simply mark off these transactions as Cleared as they appear on your bank statement.

For more information on reconciling, see the AccountEdge help (Australia | New Zealand).

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titleRelated topics
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Electronic payments (Australia)

Electronic payments (New Zealand)

Reconciling your bank accounts (Australia)

Reconciling your bank accounts (New Zealand)