The dishonour function available on the bank reconciliation page connects a withdrawn amount to a previously deposited amount for the same amount. This is problematic where the item which has been dishonoured was only part of a deposited amount. If this happens frequently, it would be better to bank cheques individually rather than in bulk.
If this happens, you can follow these steps to work around the problem until a better solution can be developed.
1. Unreconcile the original deposit, taking care to only unreconcile the deposit and not also reverse it:
2. Reconcile the banking deposit to the suspense ledger:
3. Create a manual bank statement, the original deposit amount should be entered as a spent line, then separate deposit lines as needed to split the dishonoured transactions out from the balance of the banking.
4. Reconcile the received items to the receipts from the original transactions, use the option to filter by bank deposit to find the correct list of receipts:
5. Reconcile spent line to the suspense ledger the same way as step 2. The suspense ledger will now have 2 tasks relating to this transaction, place a tick beside both and use the option to 'resolve selected' to clear them from the list.
6. Select 'Dishonour' on the bank statement for the withdrawal for the dishonoured item, and match to the deposit on the manual bank statement. If there were any fees associated with the receipt being dishonoured there will be a message to let you know. It is important to read the message, it will also let you know if the fees are being cancelled or had already been disbursed: