Fixing an incorrectly posted transaction in HandiTrust
An error may occur when processing the ATO Refund for the client, resulting in the client being overpaid.
In this scenario, the ATO Refund was $1015 but the amount was processed as $1051, the Service Fee was $150, and the Client Payment was $901. The scenario assumes the firm retains its service fee until after the bank account has been reconciled. Therefore, the balance as per bank statement is reflected as $150.
Due to a processing error, the client received an overpayment of $36. It is unlikely that the firm will recover the overpayment from the client. The firm will have to pay the difference.
A transaction that results in an overpayment
Go to View, Cards, highlight the applicable client card then click Items.
The Bank Reconciliation reflects the correct $150 balance (Firm Card consisting of the $150 Service Fee). However, it cannot be reconciled as the $1051 deposit will not materialise.
Processing the overpayment correction
You will need to put the position back to the way it was, which requires the following transactions to be input:
Firm Payment for $150.
Client Receipt for $150.
Client Receipt for $901.
Client Payment for $1051.
The ATO Refund will need to be processed again with the correct refund amount of $1015. In this scenario, the firm has decided to wear the cost and reduce the Service Fee by $36.
This will result in the Bank Reconciliation being able to be reconciled in the following manner:
The magenta rectangle entries offset each other and can be marked as Cleared.
The blue rectangle items can be marked as cleared once they appear in your Bank Statement.
The remaining balance in the bank account will be the reduced Service Fee of $114, located in the Firm Card.
Notes:
As the firm has decided to absorb the shortfall in the example, the balance as per bank statement has reduced to $114 and that is what you will have left to either transfer out or retain for your firm.
If the firm decided to pursue the matter with the client and obtain the difference back, they would:
Input a Client Receipt for $36, exercising care when posting entries and reconcile the bank account due to the timing difference involved.
Process the original entry with the shortfall in the service fee.
Apply the difference from the client as a Client Receipt for $36,
A Client Payment for $36
A Firm Receipt for the $36 to make an overall Service Fee of $150.00.