How to record an NSF

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It is inevitable that a check will be returned by the bank due to Non Sufficient Funds (NSF). So what is the best way to record this in your database?​ In essence, a NSF is handled almost the same as a Refund except that you are leaving an invoice open on the account after it is all said and done.

  1. In your database open the payment that was returned for NSF
  2. Use the ‘Refund Payment’ option to reverse that payment.
  3. Next you will need to create a new invoice for whatever that original payment was for. This re-opens the balance for that customer.
    Add any necessary NSF fees to this new invoice for the returned check.
  4. Now you need to export that refund to your accounting system. When you open the Journal Entry Export report the refund/NSF item that you recorded will not automatically appear until you check the option to include refunds
    Show Refunds Option

Alternatively you can go into your accounting software and record the returned check on the check register manually.