Dishonoured and Cancelled Cheques
Product Version: 2.04
Document Version: 1.01
Last Updated: 01/01/1601 01:00
Author: Elaine Chamberlain
This white paper will help you to …§ Manage dishonoured cheques received from agents.
§ Manage Stale and Cancelled cheques paid to suppliers.
Debtors Dishonoured Cheques
From time to time agents will pay accounts with cheques that the bank will dishonour. In these cases the bank will reverse the dishonoured cheque in the Bank Statement and the TourPlan Bank Reconciliation module will need to reflect the reversal. The agent account will need to be increased by the value of the dishonoured cheque.
Method
If the receipt is in an open period the transaction could be deleted. However, deletion will not give a trail in the Bank Reconciliation. Bank Reconciliation transactions and reports must agree with the Bank Statement.
1. Original invoice and receipt.
2. Raise a negative invoice in the booking against which to reverse the dishonoured cheque. A non booking invoice whose cheque was dishonoured can be processed in Debtors. If many invoices were included in the dishonoured cheque receipt each of these must be reversed. Make sure the Conversion Rate is acceptable if using Forex.
Original Invoice and receipt in Fastbooking display:
The invoice has now been reversed and the receipt paying that invoice must also be reversed.
3. Reverse the receipt by paying the negative invoice with a negative receipt.
4. Having reversed the original transaction the debt must be reinstated by raising another invoice. The Revenue and GST has been reversed with the reversal of the original invoice. Now raise the invoice for the same amount using the correct Exchange rate of the day. Try to match the rate of the original invoice so that if there are Variations to consider these do not produce a false figure. If Variations have been taken and are realized, try to use the exchange rate of the negative invoice date. If the exchange rate has changed and the rate at the time the debtor sends another cheque then a second forex variation could occur. Also check that the GST value is the same as the invoice reversed so that there is no GST to be accounted for in the current Return.
5. The debt has now been reinstated and the Cash reversed from the debtor/agent and the Bank Reconciliation.
6. Remember to enter any charges for the dishonour as a GL Journal to be tagged on this page also.
7. Raising transactions in this manner will ensure the General Ledger Accounts, GST, Revenue, AR Control and Bank are correctly reversed and reinstated.
AR Control will be increased by the value of the debt; GST is now at $0. GST should not include any value in the reversal/reinstatement period as it clears off to $0. The Revenue will be reduced and reinstated. As both the reversal and reinstatement are created in the current period, and travel date has probably past, there is a $0 value in the current period. The Tour Window will reflect the additional transactions but the overall Sales value will not have changed.
8. The TFS reflects no change in Sales value.
Suppliers Cancelled Cheques
From time to time cheques get lost in the mail or suppliers will lose cheques or fail to bank them before they are ‘stale’. In these cases TourPlan Bank Reconciliation module will display the cheque in the unpresented list. The Supplier/Creditor will have a zero balance for the original invoice paid. The cheque must be removed from the supplier and cleared from the Bank Reconciliation.
Method
The cheque most likely will be in a closed period and cannot be deleted. Nor should it be deleted as all cheque numbers must be accounted for in audit.
1. Original invoice and cheque. Note that there is a different exchange rate used for the invoice and cheque payment. This would result in a forex variation at the end of period April.
2. The Bank Reconciliation shows the cheque as awaiting reconciliation – unpresented.
3. Reverse the cheque paid and lost. To find the original invoice check the box for Show Fully Paid Items and apply the negative cheque to this invoice. When reversing and re-issuing the cheque make sure the same Exchange rate is used so that Forex is not taken twice.
4. Re-issue the Cheque.
5. The Bank Reconciliation now has the original unpresented cheque, the cancellations of the cheque and the newly issued cheque.
6. Send the new cheque to the supplier. If necessary print another Remittance for the original cheque so that the supplier knows what is being paid.
7. Any questions contact your Tourplan Support Desk
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