D365 - Void vendor ACH payments before uploading ACH file to the Bank

Introduction

This article is focused on reversing an ACH payment made, through the Accounts Payable Module. The main objective is to identify the transaction that will be reversed and correct it before uploading the ACH file to the bank.

Quick Summary

When a reverse of an ACH payment is made, it is important to take into account the status of said payment. If the payment has not yet been charged to the bank, the transaction is in time to be corrected.

These are the main steps for the procedure:

• Identify and Reverse the ACH transaction
• Eliminating the ACH payment
• Prepare new payment
• Validate the reverse was correctly completed.

Identify and Reverse the ACH transaction

The reverse of the ACH payment is made using the Undo Settlement feature.  For scenarios where a posted electronic payment needs to be voided or canceled, follow these steps:

1. Go to the All vendors list (Accounts Payable > Vendors > All vendors).
2. Select the vendor to void the payment.
3. With the vendor selected, select the Invoice tab and click Undo settlement.

4. Undo Settlement form will open. Select the Mark checkbox for the payment voucher that must be cancelled. The system will automatically select the Mark checkbox for the invoice voucher associated with the payment voucher selected.

5. Click Reverse. The system will disassociate the invoice voucher from the payment voucher that wants to be cancelled.

Eliminating the ACH payment

Once the original payment is reversed and disassociated from the invoice voucher, next steps are to eliminate the original ACH payment:

1. Go to the payment journal (Accounts Payable > All vendors > Invoice tab > click on Payment journal or Accounts Payable > Payments > Vendor Payment Journal > click New). 

2. Select the payment journal name; APPMT will be used for this example.

3. Enter a description for the elimination of the payment.
4. Click Lines.
5. Enter or select the vendor Account
6. Click Settle transactions.
7. Select the Mark checkbox for the payment voucher that was previously unapplied.

8. Click Ok to close the Settle transactions form.
9. The system will display the payment voucher line amount on the Credit
10. Remove the value populated in the Method of payment
11. Choose the Offset account.
12. Click Post.

Prepare new payment

Proceed to generate a new payment as usual, using the same invoice that was disassociated at step five of the  Identify and Reverse the ACH transaction section.

If the invoice will not be used and a new invoice will be created, remember to reverse the old invoice to not duplicate the expenses in D365.  Reversal of the original invoice can be completed at:

1. Accounts payable> Open vendor invoice
2. Select the invoice to be reversed.
3. Select Transactions
4. Choose Reverse transaction at Reverse
5. Complete the process.

Validate the reverse was correctly completed

Next step is to validate the reverse of transaction is completed as expected.  These are the suggestions:

1. Validate the Vendor’s transaction (Accounts Payable> All Vendors >Vendor>Transactions>Transactions)
2. Validate the transaction in Payment History form (Accounts Payable> All Vendors > Invoice >Payment History)
3. Review the transactions in Undo Settlement form (Accounts Payable> All Vendors > Invoice > Settle > Undo Settlement).
4. Validate the transactions in Cash & Bank Management.

Conclusion

Payments that are made electronically and post without going to the bank, must be reversed using an undo settlement and removed from the transactions pending payment by the vendor. The transaction will be available again, either to issue the payment with another date or with another method. You also have the option to reverse the invoice. As always, make sure to reviewed that all the processes are successfully completed.