NSF/Returned Checks

 

Overview:

Set up a Category called NSF Checks (Budget > Add Category).

Go to Banking > Bank Account > New Withdrawal.

Enter the returned check and the NSF fee. If you get repaid, enter the deposit in this Category as well. They will net out to $0. You will be able to tell at-a-glance how much NSF checks are costing you and who still owes you money.

Step-by-step instructions using an example:

Set up a Category called NSF Checks (Budget > Add Category). Budget in and budget out values should remain $0.

Go to Banking > Bank Account > New Withdrawal.

Let’s say you get a check for Gift Wrap for $50 that bounces. You have already recorded the check as income for Gift Wrap in one of your deposits. Now you have the returned check on your bank statement for $50. And you probably also have a fee of say $20.

  1. Go to Banking > New Withdrawal to enter the bounced check.
  2. Enter NSF in the Check/Reference field.
  3. Enter the date that the charge showed up on your bank statement.
  4. Enter the person’s name in the “Paid To” field.
  5. Enter the amount of the check (in this example, $50).
  6. Enter “Bounced Check – Gift Wrap” in the Details field.
  7. Select “NSF Checks Category” from the Category list.
  8. Click Save & New.

Now let’s enter the bank fee:

  1. Go to Banking > New Withdrawal to enter the bank fee.
  2. Enter the date that the charge showed up on your bank statement.
  3. Enter NSF Fee in the “Check/Reference” field.
  4. Enter the bank’s name in the “Paid To” field.
  5. Enter the person’s name & NSF fee in the “Details” field.
  6. Enter the amount of the bank fee (in this example, $20).
  7. Select “NSF Checks Category” from the Category list.
  8. Click Save & Close.

If you never get the money back, you will have a total of $70 showing for NSF Checks.

If the person gives you a new check for $70 all you need to do is make a deposit:

  1. Go to Banking > New Deposit to enter the replacement check.
  2. Enter the date of the check.
  3. Enter the person’s name & Repaid NSF in the “Details” field.
  4. Enter the amount of the bank fee (in this example, $70).
  5. Select “NSF Checks Category” from the Category list.
  6. Click Save & Close.

Now your NSF Checks Category will show a net of $0. ($70 in; $70 out).

What we like best about this method is that you don’t have to know what the NSF check was paying for, either when it was returned or when it was repaid. It also makes it very clear just how big a problem NSF’s are in your group. (If you go in and allocate the NSF to Gift Wrap, that information is essentially lost.)

 

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