Occasionally, things go wrong with Cash Receipts. If something goes wrong before the receipts have been applied to the ledger, you can simply correct the error right then and there. But, if you do not realize a mistake was made until after a batch has been posted, a Payment Adjustment is required to correct the issue. A PAY ADJUST is the reversal of a Cash Receipt (a payment). Payment Adjustments can be made on any payment taken into TOPS whether it is from Cash Receipts, Lockbox, ACH or the Check Scanner.
How you handle a payment adjustment depends on what went wrong to cause you to need to adjust the payment:
The cash was entered with the wrong received date. You can correct this by doing a Pay adjust on the date it was taken in. And the re-enter on the correct date. (This DOES NOT require a GL ENTRY*). You re-enter it through Cash Receipts.
NOTE: If the received date is correct, but the Deposit date (GL posting date) is incorrect, a General Ledger entry is needed to correct the wrong deposit date.
The cash was applied on the correct date to the wrong homeowner. You can correct this by doing a Pay Adjust on the date it was taken in. And re-enter on the same date, through Cash Receipts. (This DOES NOT require a GL ENTRY*).
The Payment is flagged for NSF (insufficient funds)
You can correct this by doing a Pay Adjust on the date the Bank states it was NSF. Not on received date. (This DOES NOT require a GL ENTRY*).
*Payment Adjustments do not need a GL Entry is because a Pay Adjust automatically applies to the homeowners account AND all the GL accounts that the original receipt did going into TOPS.
Reversing a Pay Adjust
Reversing an adjustment is not advised or needed - just re-enter the check.
Prepaids and Pay Adjusts
After applying a payment adjustment on a prepaid account, you may see PPDB code on the prepaid. What this means is that a payment was reversed -BUT- out of that payment a prepayment was then applied. You must do an Add/Waive to correct this and also add the charge back to the account.