Dishonoring a Single Cheque from a Banking Deposit

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For our Asia-Pacific customers, the term "Trust Account" is used, while European customers refer to it as "Client Account". It's important to mention that the Client/Trust Accounting functionality does not apply to customers in North America. For further information on regional terms, check out our Glossary of Regional Terminology.

When a single cheque from a banking deposit is dishonored, correcting your records may seem challenging, especially if it was part of a larger deposit. This article outlines a methodical approach to adjust your bank reconciliation record in such a scenario. Our steps are designed to help you manage this process efficiently and prepare for a more streamlined solution in the future.

Handle a Dishonored Cheque in a Combined Deposit

Unreconcile the Original Deposit
Begin by carefully un-reconciling only the original deposit without reversing it. This will allow you to adjust the specific transaction that was dishonored. 

  1. Head to the Client/Trust Accounts tab and click the View Bank Statements link. 
  2. Locate the bank statement the transaction is listed against and click the [...] Contextual Menu to navigate to View Transactions
  3. Click the Unreconcile option against the transaction then click the Unreconcile this Transaction button.


Reconcile to the Suspense Ledger 

Reconcile the banking deposit against the suspense ledger instead of directly to the original transaction. This provides a temporary holding area for discrepancies.

  1. Once the transaction is unreconciled, click the Find & Match option on the transaction. 
  2. Click the Create Suspense Transaction and enter the relevant details then click Create Payment.
  3. The transaction will now be sitting in the Suspense Ledger Tasks. 

reconcile banking to suspense.gif

Create a Manual Bank Statement 

Input the original deposit amount as a spent line on a new manual bank statement. Then, add separate deposit lines to segregate the dishonored cheque from the remainder of the deposit.

  1. To create a manual bank statement, navigate the View Bank Statements and click the Manual Bank Statement option. 
  2. Enter in one spent line item in the amount of the original deposit. 
  3. Enter a Received line item for the amount of the dishonored cheque.
  4. Enter another Received line item for the remainder of the single deposit.
  5. Enter the Closing Balance into the Confirm Closing Balance box and save. 

manual statement.gif

Reconcile Spent and Received Items

Reconcile the spent amount against the Suspense Ledger.  Match the received amounts to the original transaction receipts. Use the filtering option by bank deposit to select the correct receipts.

reconcile manual statement.gif

Clear Suspense Ledger Transactions

Reconcile the spent line to the suspense ledger as previously done with the deposit. In the suspense ledger, mark both related entries and select Resolve Selected to clear them from the ledger.

Clear Suspense.gif

Dishonor the Cheque
Go to the bank statement and select Dishonor for the withdrawn amount that corresponds to the dishonored cheque. Carefully match this to the deposit noted on the manual bank statement. Be attentive to any messages regarding fees associated with the receipt being dishonored—they will inform you if such fees are being cancelled or if they were previously disbursed


These steps should help you handle the dishonored cheque smoothly and ensure your financial records correctly reflect the actual transactions. It is also recommended to bank cheques individually to prevent such complications.

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