Processing an NSF Invoice

This article explains how to create an invoice for a customer check that has been returned by your bank due to non-sufficient funds (NSF). Both the check amount and the additional NSF fees are recorded in the client file as well as on the invoice.

After completing the invoice, a log note is created to document the date the check was received from the bank, how much the NSF check is for, the bank fee, and any additional agency fees.

This task is typically performed by an Owner/Administrator, Manager, or Bookkeeper.

Recording an NSF transaction

Retrieve the client, and then select the policy you are recording the NSF transaction for.
Click Action, and then select one item in each of the first three lists to describe what prompted this transaction.
Select Trust Accounting > Process NSF.

The Invoice window opens to the Process NSF dialog.
Select the correct Policy and the Bank Account where the bounced check was originally deposited.
Enter the details of the check returned as NSF by the bank into the NSF Check Bank Information section.
1. Click the Invoice Item drop down, and then select NSF Check.
2. Use the check returned by the bank to complete the Date Returned By Bank and Amount of Check fields.
Enter the amount of the NSF fee charged by the bank into the Bank Fee field.
Conditional: If your agency charges an NSF fee, complete the Additional Agency Charge to Insured section.
1. Select the agency NSF fee line item in the Invoice Item field.
  
  HawkSoft provides a default line item, Agency NSF Fee.
2. Enter the NSF fee charged by your agency into the Amount field.
When you are finished adding NSF fees, click Done.

An invoice for the total amount due opens, with line items for the amount of the original NSF check, bank fees, and additional agency fees already listed.
Optional: Enter comments in the Printed Comment field.

This information appears on the printed invoice.
Optional: Enter information in the Memo field.

Information in this field is for internal use only, and is not seen by the client.

Do not check the "Do not transfer to QuickBooks" box.
When you are finished creating the NSF invoice, click Save Invoice.

The Created NSF Invoice dialog opens.
Click Close Window.

The Action to Perform dialog opens.
Click Finish to close the Action menu.

The Finalize Log dialog opens.
Add log comments and create a Task as needed, and then click Save Log.

HawkSoft recommends linking the resulting log note to the log note created when your agency processed the original payment.

Refused Agency Bill NSF Payment

If the insured refuses to pay the NSF invoice, your agency should notify the carrier that the payment is invalid. The carrier should ‘flat-cancel’ the policy and credit the full net premium on the next monthly statement. When your agency receives the credit from the carrier, follow the steps below.

Retrieve the client file, and then select the policy that the refused NSF payment occurred on.
Click Action, and then select one item in each of the first three lists to describe what prompted this transaction.
Select Trust Accounting, and then Create Credit Memo.

The Credit Memo window opens.
Click the Item drop-down, and then select the line item containing the carrier name from the drop down.
Click the Description field, and then either select a description from the drop-down list, or type a custom description in.
Enter the total gross amount being credited into the Amount field.
Enter the amount of commission from the NSF transaction which your agency retained into the Retained field.
Click Save Credit Memo.

The Apply Credit to Invoices dialog opens.
Check the box next to the NSF invoice for which the customer refused payment.
Enter the full balance of the credit memo into the Apply Amount field, and then click Apply.

This will reduce the amount due to the carrier and clear the NSF Invoice.

The Create Credit Memo Saved dialog opens.
Click Close Window.

The payment is now documented in the client, the Customer Balance Summary Report, and the receipt is attached to the Attachments tab of the selected policy.

The Action menu opens.
Click Finish.

The Finalize Log dialog opens.
Optional: Add client tags and Tasks, as needed.
Add log comments and create a Task as needed, and then click Save Log.

This will zero out the NSF invoice in HawkSoft. For steps on exporting this transaction to QuickBooks, see Exporting to QuickBooks.

When the company payables statement is processed, the credit memo will appear in the list of invoices and reduce the total amount due to the carrier.

HawkSoft recommends linking the resulting log note to the log note created when your agency processed the NSF Invoice.