Entering NSF Accounts

This tutorial explains the basics of entering NSF Accounts into Collect! This includes entering debtor information and also transaction information that records the debt.

An NSF account is not a regular account where a check payment was returned to you from the bank as NSF. Rather, it is an account given to you from a client requesting that you collect on an NSF payment they received. Because the account arrives at your doorstep already in an NSF state, additional steps must be taken to track extra information, such as the check number of the original NSF check.

The steps for entering NSF accounts are:

• Preparing to enter NSF accounts by ensuring that you have an Original Principal Transaction Type and a Fee Transaction Type to use for NSF Accounts
• Creating your NSF accounts and entering debtor and check information
• Posting NSF account financial information for the debt

The rest of this document explains these steps in detail.

This tutorial assumes that each account entered represents one individual debt. If you have several debts belonging to the same debtor, it is assumed that they are each entered as a separate account in Collect! This is the most efficient approach for keeping track of NSF accounts, for both your agency and your client. Collect!'s account matching features may be used to group related accounts together, further improving efficiency.

Preparing To Enter NSF Accounts

Before entering any NSF accounts, please ensure that the following two transaction types exist in your database,

- Original Principal - Transaction Type 196
- NSF Account Fee - Fee Transaction Type 305

Original Principal Transaction Type

The Original Principal transaction type must have the Code 196. It must have Principal selected in the section labeled Account, and Enter amount on posting selected as the amount.

Original Principal Transaction Type 196

This transaction type will be used to post the amount of the original NSF payment the debt is based on.

NSF Account Fee Transaction Type

The NSF Account Fee transaction type is not a required transaction type for Collect!'s regular operations, but it is a necessity when working with NSF Accounts. It can use any code within the range of 301 to 399. It should have a check in the box labeled Copy description to transaction. In the section labeled Account, it must have Fee selected.

Select Use dollar amounts as the amount. This will display several additional fields on the right side of the form. The field labeled To Agency should be filled in with whatever amount your client charges for NSF fees.

The settings labeled Don't calculate commission and Don't calculate tax should be selected.

NSF Account Fee Transaction Type

You may also wish to select additional options, as shown in the screen shot. Settings such as Omit from daily cash report, and Omit form client statement depend on how you handle fees and what you want to show your client.

This transaction type will be used to represent the fee charged when the original payment went NSF.

Creating Your NSF Accounts

An NSF account is represented in the same manner as any other account you receive from a client, with a few notable exceptions. You will still enter the debtor information as you have received it from the client, including the name, address and contact information.

The status should be entered as NEW, ACT, or whichever status code you use to represent new accounts. The NSF status code should NOT be used, as this code is reserved for debtors from whom your business has received an NSF check.

The special considerations for NSF Accounts are:

• Check Number
• Account Type
• Charged Date

Check Number

It is recommended that you enter the check number into the Debtor's Acct (account number) field. This field is used by default in Collect! reports to represent the check number. If your client supplies you with a separate account number, you may use the Debtor's User 1 field to store the check number. Use whichever is most convenient for your method of operation.

Account Type

As shown in the screen shot below, the Type field should be set to NSF.

Charged Date

If you are reporting to credit bureaus, the Charged Date on the account MUST be the date of the original check. If you are not and will never report this account to a credit bureau, you may set up the dates however you wish.

The screen shot below is an example of a Debtor form filled out as an NSF Account.

Debtor Information for NSF Account

Posting NSF Account Financial Information

The financial information for a new NSF account consists of two transactions - Original Principal and NSF Account Fee.

The screen shot below is an example of the 196 Original Principal transaction, used to track the amount of the original NSF payment.

Original Principal - NSF Account

The screen shot below is an example of the NSF Account Fee transaction, used to track the amount of the fee charged for the NSF payment.

NSF Account Fee

To post these transactions, select the TRANSACTIONS tab and then select the NEW button to bring up a blank Transaction form. Create the two transactions, filling out the relevant information as you have received it from your client.

Wrapping Things Up

After completing the setup and entering each NSF account along with its financial information, you should have complete records of all of your clients' NSF debtors, giving you more than enough information to begin collecting.

Although these accounts can be managed in much the same way as any other debtor in your database, further tutorials on the subject will examine specialized strategies, including developing an NSF account letter series, and managing payments to NSF accounts to lend more flexibility and efficiency to day to day operations.

See Also

- Transaction Type Basics - Introduction/Accessing
- Transaction Type Samples