Recording a reversed payment that cleared the bank

Question

Hi! I need help. We had a client who paid via our 3rd party payment vendor. The vendor cleared the payment and then a day later, the payment was returned. So the vendor recorded a deposit of funds and then removal of funds. Which reflects on our bank statement. I need to record both the receivement of funds from the client and the reversal of those same funds in 2 different transactions so I can match the bank statement. Ideas?

Ramu Komireddy_9891 · Accepted Answer

Hi @User_9V660 NetSuite best practice for a "bounced" or returned payment involves keeping the original payment for the deposit, creating a Journal Entry for the reversal, and then swapping what the payment is applied to.

You will record the funds leaving your bank account using a Journal Entry.

* Go to Transactions > Financial > Make Journal Entries.
* Select the date the funds were reversed from your bank.
* On the Lines subtab, create two lines:* Line 1: Select your Bank Account. Enter the returned amount in the Credit column (this lowers your bank balance).
* Line 2: Select your Accounts Receivable (A/R) account. Enter the returned amount in the Debit column (this increases what is owed to you).
* CRITICAL: On Line 2 (the A/R line), you must select the Customer's name in the Name column.

* Save the Journal Entry.
This represents the withdrawal on your bank statement.

Reopen the Invoice & Link the Reversal

* Go to the original Customer Payment record and click Edit.
* Scroll down to the Apply subtab.
* Uncheck the box next to the original Invoice. (This un-applies the funds, making the invoice "Open" and unpaid once again).
* Check the box next to the Journal Entry you just created. (Because you tagged the customer's name on the A/R line, NetSuite treats the JE like an open charge).
* Save the Customer Payment.