Returned Checks from Customers
A returned check is the document you use to record when the bank rejects a check a customer gave you as payment (for insufficient funds, an invalid signature, an expired check or any other reason). When you save it, AdmCloud reverses the collection you had recorded, and the customer is left owing the invoice again, as if they had never paid.
What is it and what is it for?
When a customer pays you with a check, you normally record the collection with a Cash Receipt. If the bank later returns that check, you can't simply delete the receipt, because you need to keep a record of what happened: which check it was, from which customer, for how much, and which receipt it came from. That's what the Returned Check is for.
When you record it, the system does not delete the original collection; instead it creates a new document that reverses the effect of that collection: it charges the amount back to the customer and removes the same amount from the cash or bank account it had been credited to. The result is that the customer is left, once again, owing that invoice.
The most common way to use it is to open it directly from the original Cash Receipt: AdmCloud then automatically fills in the customer, subsidiary, cash account, currency and amount, and keeps a record of the link between the two documents so you can look it up later.
Screens in this area
| Screen | What it does |
|---|---|
| List | Lists every returned check recorded, with filters by customer, subsidiary and date range. You can customize which columns are visible and save your configuration. From here you can create new records, delete existing ones and open the PDF report. |
| Create / Edit | The returned check form: customer, document number and date, currency, exchange rate, cash account, total amount and, depending on your configuration, subsidiary, location, sales rep, source transaction (the cash receipt), department, division, item class and transaction type. It lets you attach supporting files and customize the form. |
| Details | The same returned check in read-only mode, with its activity history and action buttons: edit, duplicate, delete, void, print, review the accounting entry and view the applied documents. |
| A print-ready format, or one you can save as a PDF, with your company's data, the customer's data, the source receipt (if any) and the returned check's amount. |
How to record one, step by step
- Open the original cash receipt (if the bank told you that a check from an already-recorded collection was returned) and generate the returned check from there; or open the Customer Returned Checks list and click New if you'd rather create it from scratch. Either way, you need the "add" level of the corresponding permission.
- Check or select the customer the check belongs to. If you came from the cash receipt, it's already filled in.
- Confirm the currency, exchange rate and cash account the original collection's money came out of.
- Enter the returned check's amount. It must be greater than zero.
- Review the document date. AdmCloud auto-numbers the document if you leave the number blank.
- Note the reason for the return in the reference field (insufficient funds, invalid signature, expired check, etc.) so the information is available later.
- Attach a supporting file if you need to, for example the bank's notice.
- Save. The system validates the data and generates the accounting entry: a debit to the customer's receivable account and a credit to the cash account you indicated, reversing the original collection.
Key fields
| Field | What it's for |
|---|---|
| Number | The document's identifier. AdmCloud assigns it automatically if you leave it blank; it can't be changed once saved. |
| Customer | Who the returned check belongs to. Must be an active customer. |
| Document date | The date you record the check's return on. |
| Currency and exchange rate | The check's currency and its rate against the local currency; must be greater than zero. |
| Cash account | The cash or bank account the amount is deducted from, normally the same one the original collection had been credited to. It's required. |
| Total amount | The amount of the check that was returned; must be greater than zero. |
| Source transaction | The cash receipt the check came from, when the document is generated from it. It stays visible in the details so you can trace the link between the two documents. |
| Reference | Free text, for example to note the check number, the bank, or the reason for the return. |
| Sales rep | The employee tied to the original collection, if any. Must be active. |
| Subsidiary / Location | Which subsidiary and location the document belongs to for accounting purposes; only shown if your company has subsidiaries enabled. |
| Department / Division / Item class / Transaction type | Additional accounting dimensions, shown only if your company uses those modules. |
| Attached files | Supporting documents for the return, subject to your plan's file limit. |
Validations when saving
- Active customer. If the customer is inactive or voided, the system rejects the save.
- Cash account is required. Without it, the system can't generate the accounting entry or identify where the amount comes from.
- Amount greater than zero. You can't record a returned check with no amount.
- Exchange rate greater than zero when the check is in a foreign currency (if left at zero, it's automatically set to 1).
- Location consistent with the subsidiary indicated on the document.
- Active sales rep, when one is specified.
- Valid source transaction, if the document was generated from a cash receipt: the receipt must exist and not be voided.
- Open accounting period for the document's date in the Accounts Receivable module; you can't record it in an already closed period.
- When editing: the document number can't change, and if the returned check already has payments or other documents applied to it, you also can't change the customer, currency or exchange rate.
- When deleting or voiding: not allowed if the returned check has linked documents (for example, collections already applied to it); unlink those first.
Managing the document
From the details of a saved returned check, depending on your permissions, you can:
- Edit it as long as it has no applied documents blocking changes, or duplicate it to create a new one from its data.
- Delete it, if it has no linked records.
- Void it, if it has no linked records; a voided returned check can't be edited again.
- Review the accounting entry it generated, if your company uses the Accounting module.
- View the applied documents linked to this record.
- Print it in a format ready to hand over or file.
Additional capabilities depending on your setup
- Column customization: in the list, you can choose, reorder and save which columns to display.
- Custom fields: if your company added its own fields marked as visible on customer returned checks, they show up on the form.
- Form customization: you can adjust which fields are shown and in what order using the form customization tool.
- Departments, divisions, item classes and transaction types: additional fields that only appear if your company has those accounting dimensions enabled.
Availability and permissions
- Access is controlled by the "Customer Returned Checks" permission of the user group, with separate levels for browsing, adding, editing, deleting and voiding.
- Requires your company to have the Sales / Accounts Receivable module active.
- With subsidiaries enabled, each returned check is tied to a subsidiary and filters by it in the list.
- If your company uses the Accounting module, the accounting entry is generated automatically when you save; if you don't use it, the document is still recorded, just without an entry.
Tips and common mistakes
Open it from the original cash receipt whenever you can. AdmCloud then fills in the customer, currency, cash account and amount for you, and keeps a record of the link between the receipt and the returned check so you can trace it later.
This document doesn't delete the original collection, it reverses it. The cash receipt still exists in your history; the returned check is what charges the balance back to the customer. Don't try to delete or void the original receipt instead — you'd lose the trail of what happened.
Did the bank charge you a fee for the returned check? That bank fee isn't recorded automatically here; record it separately (for example, with an Account Payment against your bank-charges expense account).
Can't change the customer, currency or exchange rate while editing? That's because the returned check already has a payment or another document applied to it; unapply or void it first.