Record a Matter’s NSF (Bounced) Operating Bank Deposit

Most matter-related deposits to your operating account will fall into two categories: invoice payments and operating retainers. For accounting and recordkeeping purposes, you can record when an operating account deposit fails to clear, or bounces, due to insufficient funds (NSF). 

Record a Matter’s NSF Operating Deposit

Step 1: Modify the Original Deposit Transaction Memo Line

To modify the original deposit transaction line memo:

1. From the left navigation panel, click Accounting.
2. Atop the Accounting gray left navigation, click Bank.
3. On the Bank screen, either double-click the matter, or single-click it, and then from the toolbar, click Details.
4. From the Matter Details left navigation, click Banking.
   The Banking screen opens, displaying a listing of your firm’s banks.
5. Double-click the appropriate operating bank.
6. Locate the deposit in question. You can use search filters to expedite your search.
7. Either double-click the deposit, or single-click it, and then from the toolbar, click Edit.
8. On the Edit Operating Transaction screen, edit the Memo fields to indicate the check bounced or was rejected for NSF, referencing the reversal date.
9. Make note of the Account to which this transaction was posted.
10. In the lower right corner. click Save.
    The system saves your memo changes.

Step 2: Unlink the Deposit from the Invoice

To unlink the deposit from the invoice:

1. From the left navigation panel, click Matters.
2. On the Matters screen, either double-click the matter, or single-click it, and then from the toolbar, click Details.
3. From the Matter Details gray left navigation, click Billing.
4. From the tabs atop the Billing screen, click Invoice.
5. On the Invoice screen, locate the invoice in question. If you need to view paid and unpaid invoices, you can use search filters to expedite your search.
6. To the right of the invoice, click the orange arrow.
7. On the Invoice Details screen, note the payment dates and amounts recorded for the invoice. 
8. In the lower right corner. click Close.
   The screen closes, returning you to the Invoice screen.
9. Single-click the invoice to highlight it.
10. From the toolbar, click Action > Unfinal Invoice.
    This Unfinal Invoice message reads: Invoice status is changed to Unfinal.
11. Click OK.
    The system returns you to the Invoice screen with your highlighted invoice.
12. From the toolbar, click Edit.
13. In the upper right corner, click Generate.
    The Warning message reads: There are payments linked to this invoice. Updating this invoice will unlink the payments and money will move to Credit (Operating Retainer) Account. Do you want to continue?
14. Click Yes.
    The system unlinks the payment from the invoice and moves the original payment to the operating retainer.

Step 3: Enter a Credit Memo for the Reversal

Now that you have moved the funds from the deposit to the operating retainer, you must account for the bank’s reversal of the deposit and withdrawal of the funds from your account. To do so, you must issue a credit memo.

When issuing the credit memo:

• The system automatically populates the Amount field with the total operating retainer. If your operating retainer includes funds in addition to the bounced deposit, adjust the Amount field as needed.
• In the Memo field, enter Reversal due to NSF. Be sure to include the original check number and deposit date.

Once your credit memo is complete:

• Client balances are correct
• Invoices are unpaid
• The transaction record is accurate in all application locations.