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MiinYeo's avatar
MiinYeo
Contributing Cover User
6 years ago

How to record bounced employee due to incorrect bank account

After processing a batch (ABA) payroll, one of the pay was bounced back and recorded in bank feed as the employee has provided incorrect bank details. Do I record this bounced payment as receive money in bank feeds? How do I go about paying this into the correct bank account? I read something in previous posts about setting up a 'suspense' account. I'm not sure what this means.  TIA.

  • Steven_M's avatar
    Steven_M
    6 years ago

    Hi MiinYeo

     

    In theory, you would only need to reverse that one particular employee's pay rather than the full bulk payment.

     

    Below is a process that can be used to deal with the banking side of things with a bounced payment, although certainly not the recommended way to deal that situation.

     

    1. Go to Banking>>Receive Money. Ensure that you do have the correct bank account listed as the Deposit to account, date and amount entered. You will need to also select an allocation account (account in the grid).
    2. Once that has been recorded, you would do a Banking>>Spend Money transaction to record the amount leaving the bank account. You will need to select the same allocation account in Step 1.

    What this process will do is generate a deposit to the bank account to show the amount being deposited back in and a withdrawal when it is paid to the employee. As you are using the same allocation account it will increase the account and then decrease it thus there is no effect for those transactions on that account (withdrawal and a deposit will cancel each out other).

  • Steven_M's avatar
    Steven_M
    Former Staff
    6 years ago

    Hi MiinYeo 

     

    What I would do is:

    1. Go to Setup>>Preferences>>Enable Transactions can't be changed they must be reversed.
    2. Navigate to the payroll transaction that was processed incorrectly and go Edit>>Reverse transaction before recording that reversal.

    This will generate a reversal in the bank account for that (cash) bank account to which you can match with the necessary bank feed transaction. You will also need to re-process the payroll transaction for that employee within the software with the bank account set correctly on the card.

     

    Note: I have assumed that Setup>Linked Accounts>>Payroll Accounts - the Bank Account for Cash payments is the main bank account.

    • MiinYeo's avatar
      MiinYeo
      Contributing Cover User
      6 years ago

      Hi Steven

       

      Thanks for the recommendation. I would usually reverse payroll and then rectify. however, it's a 27 employee payrun so without having to reverse and process this again, can I record the bounce transaction by 'receive money'? If I do this, can I just transfer the bounced amount via internet banking to the correct account, then record this as spend money? I would prefer not to mess around with all the linked account associated with payroll.

      • Steven_M's avatar
        Steven_M
        Former Staff
        6 years ago

        Hi MiinYeo

         

        In theory, you would only need to reverse that one particular employee's pay rather than the full bulk payment.

         

        Below is a process that can be used to deal with the banking side of things with a bounced payment, although certainly not the recommended way to deal that situation.

         

        1. Go to Banking>>Receive Money. Ensure that you do have the correct bank account listed as the Deposit to account, date and amount entered. You will need to also select an allocation account (account in the grid).
        2. Once that has been recorded, you would do a Banking>>Spend Money transaction to record the amount leaving the bank account. You will need to select the same allocation account in Step 1.

        What this process will do is generate a deposit to the bank account to show the amount being deposited back in and a withdrawal when it is paid to the employee. As you are using the same allocation account it will increase the account and then decrease it thus there is no effect for those transactions on that account (withdrawal and a deposit will cancel each out other).

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