When you receive a cheque and the bank dishonours it, you may want to:

reverse the dishonoured cheque which will reinstate the charges
allocate bank charges to the debtor.

Every cheque contains a record of the charges that were paid by that cheque.

Reversing dishonoured cheques
To reverse a dishonoured cheque:

Select Module > Debtors > Cash Receipts Entry.
Create a new posting and name it something meaningful, for example, 'Bounced cheque'.
Select Posting Action > Reverse Bounced Payment.
The Reverse Bounced Payment window is displayed.
Click to locate the receipt number for the bad cheque.
Enter a description for the reversal that will appear on the debtor's next statement.
Note: Posting Action > Audit Print reveals that the reversal has effectively been processed as a negative cash receipt. It is recommended that you do not enter negative cash receipts manually.

Allocating bank charges to the debtor
Dishonoured cheques normally incur a bank charge. To charge the debtor for the bank fees incurred by a dishonoured cheque, either:

Create a manual charge using your code for Bank Fees - Dishonoured cheque, such as FBFEE.
Create a general ledger journal drawing the amount from the bank account into the bank fees account.

Example
A debtor gives you a cheque for $1000 to pay for $1000 owing in 120+ days. When you enter the cheque, it deletes the 120+ days overdue amount for that debtor.
The cheque is dishonoured and you subsequently reverse the bounced cheque. The original charges are reinstated and the debt is 120+ days overdue, as before.
In addition, you create a manual charge for the dishonoured fee bank charge of $25 incurred by the dishonoured cheque.
The debtor's account history will list the bounced cheque reversal and bank fee for the dishonoured cheque.
The following table shows the transactions:

Debtor Charge	Account	G/L Account	Amount
DISHON Charge:	Bank	610000	$1000-
	Debtors Control	620000	$1000
DISFEE Charge:	Bank Charges	246703	$25-
	Debtors Control	620000	$25

Browser not supported