TABLE OF CONTENTS

• Overview
• What Has Happened
• How to Correct the Register
  • Step 1: Create a Payment to Resident Transaction
  • Step 2: Post the Transaction
  • Step 3: Evaluate Whether an NSF Fee Applies
  • Step 4: Delete the Unexecutable ACH Return Web Activity, if Applicable
• Example
• Best Practices
  • Wait for Funds to Clear the Resident’s Bank Before Issuing Refunds
  • Apply NSF Fees Consistently
  • Reconcile Bank Activity to PropertyBoss
  • Train Staff on Electronic Payment Timing
• Need Additional Help?

Overview

A double reversal can occur when an electronic payment is refunded to a resident before the original payment has successfully cleared the bank. If the original payment is later returned for insufficient funds or cannot be funded, you are out the payment amount twice. 

This results in the funds appearing to leave your account twice:

• Original payment received
• Manual refund issued to resident
• Original payment returned by the bank

Refunding an electronic payment too soon can create unnecessary accounting corrections if the original payment is later returned by the bank.

What Has Happened

In this scenario:

1. The resident submits an electronic payment.
2. A staff member refunds the payment before it has cleared the resident’s bank account.
3. The original payment is later returned by the bank.
4. PropertyBoss cannot record the return because the original payment has already been reversed in the register.
5. The register still needs to reflect the returned payment so the original payment status and related activity are accurate.

The result is that the resident’s account and your bank show additional activity because money was refunded to the resident even though the original payment was never successfully collected.

How to Correct the Register

To properly document the transaction and balance the register:

Step 1: Create a Payment to Resident Transaction

Create a Payment to Resident transaction (if one does not already exist) to record the funds that were returned to the resident.

This transaction reflects what occurred in reality: money was paid out to the resident even though the original electronic payment was never successfully funded.

To create the transaction type, go to Setup Preferences > Define Transactions. This transaction is typically created under Define Lease/Prospect Transactions.

Select New, name the transaction, and choose Payment to Tenant/Member as the transaction type. You will also need to select the category that best aligns with your accounting practices.

Step 2: Post the Transaction

Post the Payment to Resident transaction on the register using one of the following dates:

• The date you manually refunded the payment, or
• The first day of your current open accounting period

Follow your company's accounting procedures when selecting the appropriate date.

Step 3: Evaluate Whether an NSF Fee Applies

Determine whether the resident should be charged a Non-Sufficient Funds (NSF) fee based on your company's policies and lease requirements.

Go to the register and Enter New Transaction. Choose NSF Charge (your transaction may be named similarly). Best practice is to date the transaction for the same date the NSF notification was received.                                                   

Step 4: Delete the Unexecutable ACH Return Web Activity, if Applicable

If an ACH Return appears in Web Activity but cannot be processed, delete the return from Web Activity. From New Web Activity, double-click the specific ACH Return, then select Delete in the lower-left corner of the window.

Example

The following activity occurs:

Without correction, the register does not fully reflect both events: the refund already issued to the resident and the returned original payment.

Creating a Payment to Resident transaction properly documents the money that was returned to the resident and keeps the accounting records accurate.

After the Payment to Resident transaction is applied to the register: 

• The payment reversal represents the ACH Return.
• The Payment to Resident transaction represents the refund issued before the return was received.

Best Practices

Wait for Funds to Clear the Resident’s Bank Before Issuing Refunds

Do not refund an electronic payment until you have confirmed with the resident that the payment has successfully cleared their bank. If the payment is still in “pending” status on a bank statement, it has not cleared.

Apply NSF Fees Consistently

If your company charges NSF fees for returned payments, be sure to follow your organization's policies and lease requirements when assessing those fees.

Reconcile Bank Activity to PropertyBoss

When correcting a double reversal, compare PropertyBoss activity to your bank statement to ensure all funds moving in and out of the account are properly reflected in the register.

Train Staff on Electronic Payment Timing

Ensure staff understand that electronic payments can take time to clear and that refunds should not be issued based solely on the presence of a payment in the tenant ledger.

Important: A double reversal typically occurs because a payment was refunded before the original electronic payment successfully cleared. The simplest way to avoid this situation is to wait until funds have been verified by the tenant’s bank before issuing a refund.

Need Additional Help?

If you are unsure whether a Payment to Resident transaction should be created or need assistance reviewing a specific transaction history, contact PropertyBoss Client Care at care@propertyboss.com for guidance.