Processing Bank Returns - Bank Return/Chargeback Notifications

Process returned payments and chargebacks from homeowners when payments fail due to insufficient funds, invalid account information, or payment disputes. This article explains how to manually process bank returns for non-Vantaca Pay payments including checks, ACH transfers, and eChecks.

When your bank processes a return or chargeback, Vantaca creates a Bank Return Notification action item in your database. You can then locate the returned payment, create a bank return action item, and adjust the homeowner ledger to reflect the returned payment and any associated fees.

Note: For Vantaca Pay payments, bank returns process automatically. For more information, see the "Vantaca Pay Automatic Bank Returns" article.

Contents

• Locate the Returned Payment 
• Create the Bank Return Action Item
• Process the Return on the Homeowner Account
• Apply Return Fees and Close the Action Item
• Handle Returns Without Notification Action Items
   

Locate the Returned Payment 

When your bank processes a return, Vantaca creates a Bank Return Notification action item assigned to the AR role by default. The action item includes a PDF attachment showing the bank's return notification.

To locate the returned payment:

1. Navigate to Homeowners > Payment Search.
   The Payment Search screen opens.
   
   
    
2. Use the Payment Date Range to narrow your search results.
3. In Description, enter the check number, last four digits of the ACH account, or eCheck identifier from the bank notification.
   The return payment displays.
4. Click Return next to the returned payment.
   The Return Item screen displays (continue to the next procedure).

Create the Bank Return Action Item

The Return Item screen allows you to record the return details before processing the adjustment on the homeowner account.

To create the bank return action item:

1. On the Return Item screen (from the previous procedure), provide the following information:
   
   
   • Adjustment Date: Enter or select the date of the return.
   • Amount of Adjustment: Enter the amount and select Debit or Credit.
   • Return Reason: Select a reason for the return (such as insufficient funds or invalid account) or manually type in a custom reason if the appropriate option is not available.
2. Click Update.
3. Click the caret (1) next to the payment entry to open the Allocation table, and then Select (2) to navigate to the homeowner account. 
   
   
    

Process the Return on the Homeowner Account

After creating the bank return action item, you must process the return on the homeowner account to remove the payment, restore the charges, and apply return fees if necessary.

To process the return on the homeowner account:

1. From the homeowner account, navigate to Homeowners > Homeowner Profile > Action Items.
2. Locate the Bank Return action item you just created, and click Select from the Hamburger menu.
3. In the Action Center panel on the left, click Return.
   
   
   
   The Post Return Item screen opens and includes the summary balances of the owners current account.
   
   
    
4. Verify the return is being processed from the correct charge type where the payment was originally applied.
   • Applied: This column shows how the original payment was distributed across charge types.
   • Adjust: Enter the same amount in this column to remove the payment from those charge types.
     Example: If $400 was applied to Special Assessment, enter $400 in the Adjust column for Special Assessment
     Note: Only adjust the amounts differently from how they were originally applied if you moved money between charge types or plan to redistribute the balance to different charges after completing the return.

5. Review all information and click Update.
   The return posts to the homeowner ledger and Vantaca automatically creates the necessary GL entries. The payment is removed from the homeowner account and the charges are restored.

Important: Do not create manual GL entries for bank returns. Vantaca handles all GL entries automatically during the bank return process. Creating additional manual entries will cause duplicate transactions and throw your accounts out of balance. For more information, see the "When to Write a Journal Entry" article.

Apply Return Fees and Close the Action Item

After processing the return, you can apply return payment fees and notify the homeowner.

To apply fees and close the action item:

1. While viewing the Bank Return action item, step it to the appropriate closing step by clicking Step in the Action Center on the left of the screen, or Step Action Item on the screen.
   This action generates an email to the homeowner notifying them of the return.
   The Change Step screen opens.
   
   
    
2. Select the appropriate next step from the Next Step field.
3. (Optional) If a return payment fees is configured in Association > Assessments for the bank return action item, the Charge Amount field dynamically displays. You can apply the fee while stepping the action item to the closing step.
4. Click Update.
    

Handle Returns Without Notification Action Items

In some cases, a return or chargeback appears in bank reconciliation without a corresponding Bank Return Notification action item in Vantaca.

To handle returns without notification action items:

1. Contact your bank to identify the chargeback details including:
   • The transaction to which the chargeback relates.
   • The reason for the return.
   • The homeowner or payment source.
2. After identifying the return details, choose the appropriate action:
   • Homeowner Payment Return: Follow the process in the "Bank Returns - NO Bank Return Notification" article to manually create a bank return action item
   • Miscellaneous Return: Navigate to Accounting > Bank Reconciliation and use the Post Expense function to reconcile the return

FAQ

Q: How do I reverse a bank return?

A: Follow these steps to reverse a bank return:

1. Navigate to the Audit tab for the date of the return and locate the entry with the Type of Void. If the payment covered multiple assessments, there will be multiple void entries on the Audit tab.
2. Scroll to the far right of the Audit tab and click Delete on the void entry. If there are multiple entries associated with the return, all will be deleted at once.
3. If applicable, delete any fees from the Audit tab that also were associated with the bank return as this will need to be done so manually.

4. Locate the Bank Return action item on the owner's account and step it to Void. Be sure to add a note in the Note field explaining the reason for the reversal for record-keeping purposes.

    

Q: I processed a bank return for a payment but the payment was not voided. Why?

A: This occurs when the bank return action item is manually stepped to a return reason instead of being processed correctly.

To resolve this:

1. Step the bank return action item to Void
2. If any fees have been charged as a result of the return, ensure those are deleted from the Audit tab
3. Navigate back to Homeowners > Payment Search and restart the return process
4. Once on the owners account, go to Homeowners > Homeowner Profile > Action Items and access the hamburger menu on the newly created bank return action item and click Select
5. After the bank return action has been selected, click the Return button in the Action Center to access the Post Return Item screen and ensure the charge(s) are properly selected for the return
6. Complete the bank return by stepping the bank return action item to the proper return reason step

This ensures the payment is properly voided when processing the bank return.

Q: I attempted a Bank Return for a payment and the action item is appearing on the owner's account, but the payment is not getting returned. Why?

A: This typically happens when only the first half of the return process has been completed. Creating the Bank Return action item (by clicking Return on the payment in Homeowners > Payment Search) initiates the process, but the action item must also be processed to complete the return.

Process the Bank Return action item:

1. Navigate to the owner's account
2. Go to Homeowners > Homeowner Profile > Action Items
3. Locate the Bank Return action item and click Select from the hamburger menu
4. Click Return in the Action Center (left side of screen) to access the Post Return Item window
5. Ensure the proper charge(s) are selected and click Update
6. Step the Bank Return action item to the appropriate return reason step

Once the Bank Return action item has been processed correctly, the payment will be successfully returned and any applicable return charges will be applied (if configured). If multiple Bank Return action items were created during the return attempt, step any duplicate action items to Void. For more information on action type charges related to bank returns, review our How to Set Up Action Item Charge Type Rules article.