Returned checks

Kimberly Duong

I was wondering what everyone's practices are when a check comes back from the bank as NSF. Specifically, how do you notate it in RE? Assuming it is a 100% donation and the person resubmits a new check there is possibility for overstating a tax deduction.

Jen Claudy

Thankfully, I think I've only had to do this once in 10 years...I would adjust the original gift to $0.00 and document the heck out of the situation.  If the donor then sends in a new check, that would be a new gift.

Barb Kunkel

Kimberly,

I agree with Jennifer on how to make the correction in RE.  In my 14 years, we only had this happen twice.  We send a letter to the donor informing them of the recent contribution was returned for the reason.  We include a copy of the returned check for the donor's records.  We also ask for a replacement money order or cashiers check for the donation with an enclosed envelope.  If the donor sends in the intended donation again, we treat it as a new donation.

Kim Berry

Here's a slight twist to the question - our annual golf tournament is coming up and we had a business send in a check but we cannot accommodate the group and they have asked for a refund.  Check is in an uncommitted batch, and because fiscal year is June 30, we already deposited the check. 



Do I commit the batch with the check as per normal and then go back and adjust gift to zero? 



Remove the gift from the batch and then just have finance manager direct that portion of deposit to miscellaneous account and then hit that same account when she issues refund?

 

Leslie Parker

I would commit and then zero out with notes. Never hurts to keep track for historical purposes.

Jen Claudy

Kim Berry:

Here's a slight twist to the question - our annual golf tournament is coming up and we had a business send in a check but we cannot accommodate the group and they have asked for a refund.  Check is in an uncommitted batch, and because fiscal year is June 30, we already deposited the check. 



Do I commit the batch with the check as per normal and then go back and adjust gift to zero? 



Remove the gift from the batch and then just have finance manager direct that portion of deposit to miscellaneous account and then hit that same account when she issues refund?

 

 

I would commit the batch, adjust the gift to $0 and again, document the heck out of it.  (I'm a big fan of documenting...within RE...so that there are fewer questions or at least easier answers in the future.)  Always best to have the data in RE than not.  Plus, next year, you will probably want this company to be included in a list to ask for participation again, and without a gift, they may not be included in your query.  Of course, you may want to be sure they get advance notice, since they couldn't participate this year.

Katherine Popowich

When I have a situation like this I will post the batch as is to balance the bank then create an adjustment batch where I will include a gift letter to indicate the reason for the adjustment being created as NSF. Then I create an action (my organization uses actions to indicate any changes done outside of the norm) saying that a letter was sent out as the cheque was returned as NSF I create myself as a solicitor and leave the action opened so that when the cheque comes back in I know we have re cooped the donation. I will then mark the action as closed once I have confirmed everything matches up.

JoAnn Strommen

We also would commit the gift in batch to provide accurate trail and balance with accounting.  Then adjust to $0.



As to comment about overstating for tax deduction, that's going to rely on integrity of the donor.  When I have been asked to issue a duplicate receipt I have often noted on the receipt that it was a duplicate or a reprint.  In this case you could note that it replaces receipt #xxx, June X, 2015, if you felt the need to.

Christine Cooke 2

I would adjust the returned check to Zero and when there is a replacement check, enter that one as a new gift.