Voiding an AR Check, Processing NSF Checks, Reversing a Customer Payment

This procedure is used to re-open invoice balances which are paid with NSF checks (checks that are subsequently returned by the customers’ bank) or to reverse payments that were applied incorrectly.  The AR check record which is processed is set to status V (if an NSF check is being voided) or K (if a payment is simply being reversed) and the deposit number of the check record is set to 99999999.   To void an AR check record you should perform the following steps. 

Note: If the check is NSF and returned from the bank for the first time you should contact the customer to resolve the payment problem and/or re-deposit the check to see if it clears the bank the second time.  You may not wish to reopen the invoices paid with the check if there is a good chance that it will clear the bank the second time.  By not reopening the invoices, you avoid applying more recent payments to the invoices that were paid with the NSF check.  The system will also only allow you to create a specific check number once for a single customer.  If you void and re-enter the check you will have to modify the check number.

1.  Identify the payment to be voided, the customer from which the payment was received and determine whether the payment is being voided due to an operator error or because of an NSF (returned) check.

2.  View the transaction detail for the AR check record to determine if the check was used to create an OP (ovepayment), PP (prepayment), or DM (debit memo) invoice.  If the check was used to create a payment type invoice AND if the OP,PP or DM invoice was then applied (used to adjust another invoice balance), you should reverse the application using the Invoice Adjustment program.  This will allow the Void process to correctly close out the payment invoice (see note at end of this section for more details).

3.  If the check is being returned NSF and you wish to prevent any further shipments to the customer you may set the Status of the Customer Master record for the account to H (Hold) or I (Inactive) to either hold or prevent entry of new sales orders for the customer. 

4.  You may also wish to change the customer payment terms and or credit limit as appropriate.

5.  Locate and edit any open sales orders for the customer using the Sales Order Inquiry program.  This will place the orders for the customer to hold status as they are saved and prevent them from shipping until the hold is released.

6.  Add appropriate notes to the customer record using the customer comments and/or the customer Sales Notes fields that are maintained from the Customer Manager program and displayed in the order entry program.

7.  Select the AR Check Lookup program from the AR Operations Menu.

8.  Locate and select the check to be voided or reversed.  You may locate an individual check record in the AR Check Lookup program using any of the several different display and search sequences available in the program.  To select a check you should position the light bar displayed by the program over the appropriate check record.  You may view the invoices paid with the selected check or view more detail for the selected check by using the Expand and the Zoom options.

9.  Press the Void Check Button to void the check.  The system will prompt you to indicate whether the check is being voided due to an operator error or due to an NSF check.  If you indicate a mistake, the check status will be set to K and the customer NSF counter will not be updated.  If you indicate an NSF check, the check status will be set to V and the customer NSF counter will be incremented by one.   The system will also allow you to specify a post date to be used for the void transaction.  The post date will default to the system date but can be changed as necessary.  

Important Note: Checks used to create Prepayment and Overpayment invoices:  If the AR Check you are voiding was used to create a payment type invoice record – like a type PP (prepayment), OP (overpayment), or DM (debit memo) invoice record, AND the PP, OP or DM invoice has been applied (used to adjust the balance of another invoice), you should reverse the adjustment before voiding the check.  This step will ensure the PP, OP or DM invoice has the same balance it did when it was created  (when  the check was applied).  If a check is used to create a prepayment, the prepayment is then applied, and the check is voided, the system reverses the original transaction – it does not know about or reverse the transaction used to apply the PP invoice.  This fact can cause the ck void program set the open balance of the PP invoice incorrectly when the void is processed.  This is not a problem if the PP application is reversed prior to voiding the check, and the Prepayment has its original open balance when the void is processed.


Issuing a Customer Refund