RECUR360Pay - NSF/Chargeback Automation Setup QuickBooks Desktop

The NSF Invoice process allows the original payment to remain in your QuickBooks, since it was deposited in your bank account.

• Once a payment is marked as deposited in QuickBooks, it will no longer allow you to void it.
• The NSF invoice process moves the original (bounced) payment to a separate NSF invoice; this reinstates the balance due on the original invoice.
• It can also add a NSF/Return fee to the invoice to charge your customer for the bounce fee. (Typically, $25.00)

What we do:

• Create a NSF invoice to account for the returned/charged back payment
• Move the returned/charged back payment from the original invoice to the NSF invoice, reinstating the balance on the original invoice and showing the correct aging of the invoice.
• Move the original invoice to the Collections Center. (Now that it shows a balance)
• Add a processing fee onto the original invoice to account for the charge to you from Recur360Pay. 
• Email the customer about the returned/ charged back payment. 

Credit Card Chargebacks

• Credit card chargebacks can happen at anytime after a credit card is processed. 
• Typically you will not see chargebacks processed 180 days after the transaction is processed (6 months). 
• These transactions can be triggered automatically by the bank, or a dispute can be initiated by the card holder.
• To learn more about chargebacks, visit our Chargebacks article. 

ACH Returns

• An ACH return can happen anytime after the transaction is processed. 
• Are typically provided by the bank within 7-10 business days with no customer intervention (besides a few cases)
• These can include but are not limited to R01- insufficient funds, R02- Account closed, R03- No Account/ Unable to locate account, etc. 
• To learn more about ACH return code reasons vist our ACH Return Codes article. 

When either a chargeback or ACH return comes through the money is removed from your bank account and the status changes to chargedback or ACH Returned.

ACH Return Example:

Chargeback Example:

In Settings- Payment Processors, under the Void, Chargeback, and ACH/EFT Return Actions, you can have Recur360 automatically create a chargeback or ACH Return invoice. 

• We label these invoices as NSF invoices. (Non-Sufficient Funds)

If you do not have an NSF clearing account set up, you will want to start there.

• In QuickBooks Desktop click Lists- Chart of accounts. 

• Click the arrow next to 'Account' in the bottom left and select 'New' at the top of the menu.  

• Click the radial next to Bank, then select continue. 

• Put in the account name and make sure the account type says 'Bank'. Then select save and close. 

To finish setting this up you will need 2 new parts in your QuickBooks Item list:

• Click Lists- Item lists

• Click the arrow next to 'Item' at the bottom left of the screen. 

• In QuickBooks the first product/service is an NSF Invoice item. Make sure to check the 'Type' then enter a name for the item. Also make sure the account at the bottom is the clearing account created. Click 'OK' to save. 

Note: The NSF Return item should NOT be linked to a Sales income account - this item will be used to invoice for the return and should be linked to a "Bank" type GL account (above you see it is linked to an NSF Clearing Account). This way you can track the balance in the NSF Clearing account and zero the GL account back out when Recur360 records the payment being deducted from your bank deposit.

• In QuickBooks the second product/service item is the NSF fee. 

If you just created these items in QuickBooks, you will need to Sync Data in Recur360 so they will be available to select.

• Run the Web Connector to sync the data. 

In Recur360 under Settings - Payment Processors -Void, Chargeback, and ACH return actions open the dropdown, 'When a payment is found to be Charged Back/Returned' select Create ACH NSF/Chargeback NSF Invoice.

• You can also set the options for voided payments in this section as well. 

• If needed have Recur360 automatically make changes to how the customers pay online link works and remove the affected payment method in Settings-Payment Processors.

For all of these settings that are selected:

• This will cause the customer to get an email the next time the recurring invoice/payment processes so they can update the information.
• The payment method will still be stored in the customer and can be used or re-linked to the recurring invoice by editing the recurring invoice and choosing it.

• or selecting the "Apply to All" button under the payment method in the Customer edit screen.

In the Returned Check Item, Card Chargeback item, Refunded check item, and Card refund item, dropdown search for your NSF Invoice Item.

• • Next select the terms that you would like your customers to see. Remember NOT to include the term you are setting for the NSF invoices. 

• • By default, all invoices are shown to customers in their pay online link, including NSF invoices. NSF invoices to have a colored badge in front of the invoice number showing the customer it is a special invoice
  • This is how the default settings will look in the online pay link. 

In settings- payment processors you can modify the text of the email that will be sent to customers if you have selected the system to send an email.

• • The last option is to add a NSF/Return fee for the bounce/chargeback.
  • Choose the item that Recur360 will add to the invoice, you can set it to either charge a flat fee or a percent.
  • If you choose percent, it will calculate the percentage of the invoice total that triggered the bounce/chargeback. 
  • Remember to select the NSF Fee item you created here too. 

If you would like to limit what your customers can see in the pay online link, you can also create a separate NSF Payment Term in QuickBooks.

• • Since these NSF invoices are purely for accounting purposes and not sales related, you might not want your customers to see them in the pay online link. 
  • If this payment term is set as the default for the NSF invoice you can then hide NSF type invoices from your customers in their pay online link.
  • Go to Settings- Email Settings 

• • Then Invoice Link Settings

• • If you set the NSF term to something specific, then in the Settings - Email screen you can limit what invoices a customer sees.
  • If you select All of the Other payment terms & leave the NSF term out then those types of invoices will not show on the customer pay online page. 

If you choose to send emails to your customers, we recommend that you enable the setting to show the failure reason (like R01 - Insufficient Funds) In Settings- Email Settings Invoice Settings towards the bottom of the section.

In our Settings - Notifications area you can enable the option to receive an email when an ACH Return or Chargeback happens: