How do I account for a payment that has bounced, been refunded or has been returned?

From time to time, there may be erroneous entries on your bank statement. This is usually where a payment has bounced, been placed incorrectly due to a bank error, or been rejected for some other reason. A common reason can be a rejected cheque.

On most occasions where this happens, you will see a pair of matching entries, one credit, and one debit, rectifying the error. 

(1) You should record the outgoing payment as a 'bank fee' (being sure to un-check the 'remember this transaction' box)

(2) you should match the incoming returned/refunded amount as a 'supplier refund;' to the same expenditure category (being sure to un-check the 'remember this transaction' box)

Combined, these two matched transactions will have £0 effect on the total for that expenditure category. 

To better understand the Bank Reconciliation module, please view the module overview video here.