Introduction

In NetSuite, you have the option to install an additional Suite App Bundle named “Electronic Bank Payments” (ID 339110). This bundle is also often named “EFT Module” or “Batch Payments”. The bundle allows the user to create payment batches or direct debit batches that can be imported directly into your online bank portal by hand or with the use of Connectivity SFTP. In most situations, the bank will process the Batch as one line on the bank statement, but it can happen that the bank provides feedback with individual lines. Often it's possible to change the behavior by editing a particular parameter in the “Payment File Template”. We recommend contacting your bank for more information if needed. In this documentation, we will provide the best practices for both situations.

After several days it could happen that the bank deducts again a single payment from the direct debit batch because for example the customer fund was insufficient or the customer simply reversed the payment manually because of a dispute. The direct debit reversal feature allows the user to simply reverse the created payment in NetSuite. The Bank Reconciliation Suite App will create a custom “Direct Debit Reversal Journal” transaction that will be connected to the already existing payment and the payment will be disconnected from the invoice. Due to this process, the actual invoice will be set back in the status open and a full history is present in your NetSuite system that a particular direct debit has been reversed.

Configuration

Direct debit reversals can be created automatically and manually.

Automatic Processing Settings

Automatically processing direct debit reversals can only happen if the bank does provide the reversal (DDR code) inside the bank statement data. In most cases, this data is only present in the following file types

CAMT.053
CAMT.054
PAIN002
CSV

To enable the automatic reversal option please read the documentation on the page “Retrieve the direct debit reversal code”. If this is set up the system will in most cases work fully automatically, but if for some reason the sytem was not able to reverse the direct debit then the user can always proceed manually.

Manual Processing Settings

To manually reverse a direct debit transaction the ZoneReconcile uses a popup screen that will show all reversible transactions from all customers related to the bank account you are working on. The timeframe in which a reversal can happen is for each country different and can vary between 14 till 60 days. The general setup allows configuring till how many days in the past the Bank Reconciliation Suite App will show reversible transactions. To protect the end-user to reverse transactions that are too old we recommend limiting this setting. To set the correct value navigate to Setup > Company> General Preferences > Custom Preferences (subtab). In this section, there is a section labeled “ZoneReconcile”. In the field, you can set the number of days prior to today. Today’s date is the actual date present on the bank statement transaction line.

Manual Process a Reversal

To create manually a direct debit reversal import or open an existing statement in the edit modus.

Open the Direct Debit Reversal pop-up

On the bank statement line, there is a column labeled “Alt Match Type”. If you select this field on the bank statement you will get a dropdown with several options. One of the presented options is “Direct Debit Reversal”. Note that the line should be a debit line.

Filtering & Selecting the Transaction

The pop that opens the system will show by default all the customer payments from all the customers related to the bank subsidiary you are working in and will limit the results based on the set number of days prior to the statement transaction date. In most cases, the number of results will be too much to select manually directly the wanted transaction. In the header of the popup, we offer the option to filter the data based on the following parameters.

Payment number
Customer name
From date
To date

When you set a value for a specific filter you must press the grey button labeled “Filter” to apply the filtering. In this example, the popup is filtered on the customer “Jennings Financial”. If a suitable customer payment is found that must be reversed simply check the checkbox “Process” and press the blue button labeled “Submit”.

Outcome

After saving the statement the column “Payment Number” will hold a custom transaction number.

When you open this transaction you will see that the type is a “Direct Debit Reversal” and that it looks equal to a normal journal posting. This custom transaction type is now connected with the payment and debits the Account Receivable.

The payment should now look like this.

zonereconcile_direct_debit_reveresal_payment_record.png

The original invoice is now again in the status “Open” and should automatically be included in the next direct debit batch run.

Tracking reversal attempts

General Information

The logic of creating Direct debit reversals can further be extended to handle problematic backlog of unpaid Customer Invoices. This logic allows users to setup and track number of reversals, processed for a single Customer Invoice. By tracking the number of reversals, users can be easily notified of reversals processed, up to a defined threshold.

The defined threshold can be configured under the Bank Account configuration as “Allowed number of attempts”. When this set threshold is reached, an additional checkbox will be marked on the Customer Invoice, named “Do not reprocess direct debit“. “Do not reprocess direct debit” is aimed to tackle invoices/instalments that have been returned too often. When this checkbox is enabled, it provides the end user a notification to take an action (example - contact the customer).

zonereconcile_direct_debit_reveresal_do_not_reprocess.png

Track attempts

To enable the tracking functionality, take into consideration the setup of Retrieve the Direct Debit Reversal Code (DDR Code). This setup will retrieve the Direct debit reversal reason code and copy it to the dedicated Customer Invoice. Then, enable the RECORD DDR REVERSALS checkbox on the Bank Account Configuration. This checkbox will enable the tracking itself.

Additionally, state the NUMBER OF REVERSAL ATTEMPTS ALLOWED according to business requirements. Please note, the Number of reversal attempts starts with “0”, which means only one reversal attempt is allowed, and on the second attempt, the system will enable the “Do not reprocess direct debit“ checkbox on the Customer Invoice. This checkbox is also open for users to mark manually, in case certain invoices or installments must not be sent to the bank for a second time.

zonereconcile_direct_debit_reveresal_track_attempts_preferences.png

Moreover, to match Reversed payments, make sure MATCH DIRECT DEBIT REVERSALS ON DOCUMENT NUMBER is enabled under Matching preferences. CREATE DIRECT DEBIT REVERSAL WHEN AUTO-MATCHING ON CUSTOMER PAYMENT checkbox is a general prerequisite to generate the custom reversals transactions. Make sure it is enabled.