Reversing or Dishonoring a Receipt in a Client/Trust Account

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.

This article is designed to guide you through the process of reversing or dishonouring a receipt in your Client/Trust Account. Whether due to an error or a payment dishonour, it's important to know how to correctly adjust your records to maintain accurate financials accounts. We'll provide you with a step-by-step process to handle these situations effectively.

Reversing a Receipt

If a payment must be reversed, please follow these steps:

1. Navigate to the invoice associated with the payment you wish to reverse and click on the Less Payment hyperlink.
2. Select the Reconciled hyperlink to view the bank statement containing the original payment, which will be highlighted in blue.
3. Choose to either Dishonour or Unreconcile; if the Unreconcile option is greyed out, the transaction cannot be reversed due to insufficient funds held on the Ledger.
4. Under Unreconcile This Transaction? provide a reason for the reversal and click the red Unreconcile and Reverse This Transaction button. Avoid using the orange Unreconcile This Transaction button as it will only unreconcile the payment without reversing it, leaving the invoice marked as paid.
5. Once done, the bank statement will display the transaction as unreconciled and the invoice as unpaid. To reconcile this payment with a new invoice, return to the Client / Trust Account page and select Unreconciled transaction on an unreconciled statement.

Dishonouring a Tenant's Rental Payment

Should a tenant's payment be returned or bounce, ensure you handle it as follows:

1. In the Bank Statement Reconciliation section, find the dishonoured payment on the left side of the screen and click Dishonour.
2. This will display a list of all payments made in that amount. Click on the correct payment entry to dishonour it.
3. Following these steps will reconcile, reverse, and mark the payment as dishonoured.
4. If the original deposit and the dishonour withdrawal are both present in the bank statement, first record the deposited funds, then proceed to dishonour the transaction.

By following these instructions, you can confidently manage the reversal or dishonour of payments within your Trust or Client Account, ensuring your financial records remain accurate and reliable.