How do I account for a payment that has bounced, been refunded or has been returned?
This article explains how to reconcile bank statement transactions that occur when a payment bounces, is refunded or is returned.
In this article:
Bank statement transactions from errors or refunds
From time to time, there may be entries on your bank statement that appear like errors, or where your payment was refunded.
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. Or perhaps you paid money to an incorrect bank account and it was paid back.
On most occasions where this happens, you will see a pair of matching entries, one paid out transaction, and one paid in transaction for the same amount, cancelling out the error.
If the cause is that the supplier bank details or payee bank details are incorrect within ExpensePlus, then you should update these.
How to reconcile these transactions
1) You should record the first outgoing payment as a 'Bank / Processing Fee', making sure to un-check the 'Remember this Transaction' box.
2) You should match the incoming amount as a 'Supplier Refund' to the same expenditure category, making 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.
3) If you need to make the payment again, for example to the correct bank account, you can make the payment, without entering it again as a purchase in ExpensePlus.
When the transaction appears in the bank statement screen, reconcile this transaction as usual.
To better understand the Bank Reconciliation module, please view the module overview video here.