Reverse a deposit (returned or bounced payment)

Reverse a deposited payment when the bank returns it — a bounced or NSF (non-sufficient-funds) check, for example. Reversing puts the original charge back as unpaid, removes the money from your bank balance, and optionally adds a fee to the tenant for the returned payment, all while keeping a clear record of what happened.

Reversing is different from deleting. Reverse a payment for a real-world return (a check bounced). It keeps an audit trail of the original payment and the return. Deleting a deposit, by contrast, just un-groups a batch you built incorrectly. See Delete a deposit.

Before you start

• The payment you’re reversing must already be part of a deposit, and that deposit must not be reconciled (a reconciled payment can’t be reversed from the deposit until the reconciliation is removed). See Undo or delete a reconciliation.
• Decide whether you want to charge the tenant a returned-payment fee (such as an NSF fee), and which income account that fee should post to.

Steps

1. Open the deposit that contains the returned payment: from the left sidebar click Banking, open the bank account, and open the deposit’s Summary page.

2. In the list of payments on the deposit, find the returned payment, open its row Action dropdown, and choose Reverse Transaction. This opens the Deposit Reversed screen for that payment.

   

3. Enter the Date of the reversal (the date the bank returned the payment).

4. Add an optional Memo explaining why the payment was reversed, for example “Check returned NSF”.

5. (Optional) To charge the tenant a fee for the returned payment, check the add-fee option and enter:

   • The Account the fee should post to (for example “NSF Fee” or “Late Fee”).
   • The Charge Date.
   • The Amount of the fee.

6. Click Save.

What you’ll see

You land on the deposit-reversed summary. The original charge is marked unpaid again, the reversed amount is subtracted from the bank account’s balance, and — if you added a fee — a new charge appears on the tenant’s ledger. The payment now shows as REVERSED on the deposit, so the history of both the payment and its return is preserved.

Tips

• Reverse the payment instead of deleting it. Reversing keeps a clear audit trail of the original payment and the return, which matters for your records and for the tenant’s ledger.
• The reversal appears as its own item you can clear during reconciliation, so your bank statement’s returned-item line still lines up. See Reconcile a bank account.

Related articles

• Create a deposit batch
• Delete a deposit
• Reconcile a bank account