PSA L&P - Checks: How to void a check from a prior fiscal year

How to void a check from a prior fiscal year

Only checks which have not been cleared on a Bank Reconciliation may be voided. If they've been cleared, they've been cashed, so they cannot be voided.

To void a check from a prior fiscal year, you simply pull up the check and click the void button as you do any other void. If the void button is missing, it is because the check was cleared on a bank reconciliation or because your account does not have permission to void the check. In either case, you must contact your church administrator as support may not make changes to the bank reconciliation nor to the account permissions.

Once you clicked the void button, you will be prompted for the void date. By design, the void date must be in the current fiscal period or after.

Voiding the check will create a transaction that will reverse the original check on the void date:
Debit: Bank Account
Credit: Expense Account

Once you have voided the check, you must mark both the original check and the voiding transaction on the next bank reconciliation. This will ensure the check no longer displays as an uncleared item on future reconciliations.

How does this affect the expense account and reporting?

If the check written in the prior fiscal year was written in error, expenses were inflated that whole time. If you've already closed your year and printed all of your reports, you may want to talk to an accountant before making any journal entries which will update your books accordingly. They may recommend creating a journal entry or two and tell you which accounts to use. Support is not authorized to make these decisions.

Since the check was written in the prior fiscal year and since the void lowers expenses in the new year, now expenses will be under-reported for the current year. There is a way to fix the under-reported expense, but before doing so, we highly recommend talking to your finance committee or an accountant to find out how they would like you to handle it. If they approve, you could make a journal entry on the same date as the void which will Debit the expense account and Credit the account recommended by your finance committee or by your accountant. Support is not authorized to make these decisions. This will at least fix the issue where expenses are under-reported in the current fiscal year.

The screenshots below show an example of how the ledger is affected by each transaction. The accounts used are for demonstration purposes only and do not represent a recommendation. Only your finance committee or accountant can recommend the correct accounts to use.

Prior Fiscal Year Bill