Troubleshooting
Role: Administrator · Accountant · Bookkeeper · Office adminArea: Accounting, Payments, Invoicing · All versions
What you're seeing
A check payment recorded on an invoice is supposed to represent money that cleared the bank. Instead, the check was returned — often for non-sufficient funds (NSF) or an invalid account — but the payment still shows on the invoice as if it were paid, so the invoice's balance is wrong. You may only need to record the reversal (leaving a balance owed), or you may also need to collect a replacement payment by the same or a different method.
Why this happens
There is 1 common reason.
Reason 1
The check was returned by the bank, so the recorded payment no longer represents real money.
ServiceTitan doesn't automatically reverse a payment when a check bounces, so you record the reversal yourself by adding a negative payment on an adjustment invoice.
Before you start
You need a negative payment type set up for returned checks. This is a custom payment type (commonly named NSF Check, Bounced Check, or Return Payment) configured in Settings > Invoicing > Payment and Invoice Types. Set it up as a negative payment that maps to the Undeposited Funds GL account. If your account doesn't have one, set it up first, or use an equivalent negative-payment type.
Note: To make the GL Account field available when configuring the payment type, check the Export as Journal Entry radio button first. Once the GL account is set, you can switch back to Export as Payment if you don't want the type to export as a journal entry.
You need the Add adjustment invoice and Create payment permissions to create adjustment invoices and to add or edit payments. If you don't have it, contact your administrator.
How to fix it
Note: This article covers the scenario where the original invoice has already been exported.
Start with Check 1 to record the returned check. If you also need to collect a replacement payment, use either Check 2 or Check 3, depending on how the customer pays.
Note: If the payment has not yet been exported, the Automated Refund Workflow is the preferred method. See Collect a replacement payment using the Automated Refund Workflow (not exported) below. The manual steps in Checks 1 through 3 are the correct path once the payment has been exported, because the Automated Refund Workflow does not apply to exported payments.
1Record the returned check on the invoice
Create a new adjustment invoice for the invoice you want to correct.
From the adjustment invoice, click Add a payment.
Enter the amount of the NSF check as a negative value.
Select the NSF Check (or equivalent) payment type.
✓ Done · The negative payment posts to the adjustment invoice and the original invoice shows a balance owed again. If you only need to record the returned check, you're done.
2Collect a replacement payment on the same invoice (placeholder-task method)
Use this if the customer pays again with the same kind of payment (for example, a new check) and you want to apply it to the original invoice.
On the adjustment invoice, add a placeholder task for the same amount as the returned check.
Collect and apply the payment on the original invoice.
Delete the placeholder task from the adjustment invoice.
✓ Done · The original invoice shows a $0.00 balance and the placeholder task is gone.
Note: The placeholder task is needed because a balance won't appear on the Collect and Apply Payments screen without a supporting line item. This is a known product behavior, not a bug.
3Collect a replacement payment with a different method (for example, a credit card)
Use this if the customer pays with a different method and you apply the payment to the adjustment invoice.
Go to the adjustment invoice you created for the returned check.
Add a new payment for the full invoice amount.
Select the payment method.
Enter the payment details.
Apply the payment to the adjustment invoice.
Verify the balance shows $0.00 on the original invoice.
✓ Done · The original invoice shows a $0.00 balance. You don't need to delete any placeholder task in this scenario if the adjustment invoice already has a zero balance.
Collect a replacement payment using the Automated Refund Workflow (not exported)
Use this only if the payment has not yet been exported to your accounting system. This is the cleaner, preferred path when it is available, because it generates the negative task and negative payment on the adjustment invoice automatically.
Configure a refund workflow with a failed-payment reason (for example, "NSF"). This generates a negative task and a negative payment on the adjustment invoice.
Create a new adjustment invoice for the replacement amount.
Apply the replacement payment to that adjustment invoice.
✓ Done · The original invoice reflects the reversed payment, and the replacement payment is applied.
Caution: The Automated Refund Workflow applies only to payments that have not yet been exported to your accounting system. If the payment has already been exported, use the manual method in Checks 1 through 3 instead.
Still not working?
Contact ServiceTitan Technical Support at go.servicetitan.com/ask with:
The customer name and invoice number(s)
The returned check amount, check number, and the date it was returned
The payment type you used for the negative payment (for example, NSF Check)
Whether you were recording the reversal only or also collecting a replacement payment, and which method
Whether the original payment had already been exported to your accounting system
Which checks from this article you already tried
Want to learn more?
Accounting Process for Bounced Checks: recommended workflow ›
The recommended end-to-end workflow for handling bounced checks in ServiceTitan.
Refund a payment applied to an invoice ›
How to refund a payment that has been applied to an invoice.