Returned Check, NSF, Failed Payment

It's easy to track real-world banking transactions related to returned and failed payments in Rentec Direct.

This article reviews the following subjects. Click on any of the links to jump to that section:

• Online payment via ACH failed for any reason, including insufficient or non-sufficient funds (NSF)
  • Automated entry to offset payment
  • Automatically apply NSF Fees
• Returned paper check
  • Manually enter the adjustment
  • Manually entering the NSF Fees
• Online payment via ACH failed for insufficient or non-sufficient funds (NSF) accounts established prior to June 2020

Pro Tip:

Most housing providers can charge NSF fees for failed payments, but the legality and limits vary by state and local laws. Include these details in rental agreements. Some states allow "reasonable" charges, while others have strict limits. Learn more here.

If the Tenant made an online payment via ACH

Rentec Direct's automated features react when an online payment made via ACH through Rentec Direct fails for any reason, including NSF. The date the notification of the failed payment is received:

• The software will automatically post a debit entry to offset the failed ACH payment

  The software will automatically post an NSF fee to the tenant's ledger when the feature is enabled, following these steps.

  In your Rentec Direct account:

  1. Click on Settings
  2. Under Financial, click on Online Payments
  3. Under ACH Settings, specify the fee amount for rejected or returned ACH payments. (Leave this blank or set it to 0.00 if you do not want automated fees.)         

Learn more about Automated NSF Fees for failed ACH payments

If the tenant paid by paper check:

Ledger adjustments and NSF fees will need to be manually entered for failed payments made via paper check.

In your Rentec Direct account:

1. Click on Tenants
2. Click on the tenant's balance to enter the ledger
3. Locate the transaction that failed and make note of the transaction date & check number
4. While in the ledger, click the green Post Income button to Post Payment

5. Enter a NEGATIVE payment amount that reflects the original payment and use the original check number.

   

6. Add a description in the Memo line. For example, 'NSF (payment date)' or 'Payment Failed (payment date)'.
7. Select the Bank Account that these funds were deposited into, if applicable.
8. Click Post Income to save. 
9. Once the adjustment has been entered, click on Post Charge to add any charges/NSF fees that may apply
10. Click on Post Charge

Accounts established prior to June 2020

If your merchant account was established prior to June 2020, you may want to update your settings by following these steps. 

In your Rentec Direct account:

1. Click on Settings
2. Under Program, click on Program Defaults
3. Click on Edit Advanced Settings 
4. Under Payment Options, change the setting labeled 'Set returned tenant ACH transactions to zero?' to No.
5. Click on Save Changes

System Notes: 

• You may also want to post additional ledger entries for late fees and/or NSF fees at this time. 
• If you have automatic management fees set up on the property, you will also want to remove the management fee from the property ledger after posting this transaction
• If you are implementing a convenience fee for ACH transactions that are posting to the property, you will want to make adjustments as needed

Automated NSF Fees for failed ACH payments

System Note: All check and reference fields can hold up to 45 characters