How to Record Dishonoured Payments in Xero?

by Sandra Jordan Xero Technical Support

Xero has been one of the most important tools for recording and maintaining records of transactions. In this blog, you will learn how to record a dishonoured payment made by a customer. Let’s have a quick look through the recording process-

Dishonoured Customer Payment

You are required to remove the remittance from the invoice when the payment made by the client dishonours and have to wait till the invoice is reset. This step is actually implied to the single payments made instead of the individual invoices. These steps are also applicable for bounced cheques.

Recording the dishonoured payments-

From the bank account or original invoice, search and remove the original amount received. It will delete the remittance from the invoice and will change the status to awaiting payment.
Now, make a receive money transaction for the original payment received. To code the remittance, you can select account like Dishonoured Customer Payments. You can also create one if you any on your Chart of Accounts. You can also reconcile the payment received transaction in the customer remittance received in your bank account.
For the reversal, create a spent money transaction.
Also, add a note along with the invoice.
Once the replacement client payment is clear you can reconcile it with the unpaid invoice.

Charging the customer for the bank fees incurred-

You can create a spend money transaction and record it in the account like Bank Fees when you see the bank charges displayed on your bank statement.
Inform the client for the amounts you spent.
Create a received money transaction once the customer pays you the amount. And then record it in the spend money transactions.

Recording the debt off-

You can raise a credit note in the accounting software for writing the debt off if customer is not going to make the payment.

Xero Support New Zealnad is a one stop solution provider for all the accounting related issues. Dial Xero help desk number 048879113.

If you are dealing with any issue while using the accounting program then get in touch with our team of experienced staff who will help you. Dial Xero Customer Support Number 048879113 and talk to our experts directly. You can also reach us via live chat or email.

Read this blog also: What are the steps to setup bank feeds in Xero Account?