NSF – Non Sufficient Funds explained

You receive a cheque from a customer, lodge it to your bank and enter and post it in Dynamics GP. 3 days later you get notice that the cheque has bounced. Its time to post an NSF. An NSF transaction will:

1. Unapply the Receipt and mark it as ‘Voided’…that asterisk we all know and love!
2. Back out the original General Ledger distributions.
3. If you’re using Bank Reconciliation, payments are unapplied, any distributions are reversed.
4. The customers balance is updated to reflect the bounced payment.
5. Sales commissions calculated when the payment was received are reversed with negative amounts, and are re-marked as unpaid.
6. Bank Reconciliation is updated.

What happens when you NSF a cash receipt is that it is voided. A debit is not posted to the debtors account. The Cash Receipt is still listed on the debtors account (Enquiry >> Sales >> Transaction by Debtor)…but there is an Asterisk beside the documents status. The asterisk denotes voided tansactions, and these are ‘ignored’ by GP when it calculates balances owing etc. The invoice that the payment was applied against is made available for applying to a new cash receipt.