(Available in Diamond and 24karat)

When a check bounces, it becomes a loan. The check record must be changed to change the status of the check from 'cashed check' to 'bad check'.

Go to File, Program Setup, Payday tab. Set up a loan type named 'Bad Check' and enter the amounts to be charged for back checks.

Editing a Cashed Check Record

Next, go to the Pawns Work Area and double click on the check writer's record to open the Change-Check-Status Screen. Use the drop-down menu for Convert to Loan Type and select Bad Check.

Click OK.

PPSS will make the appropriate accounting changes to reflect the new status of the check.

When the check is converted to a loan, reports no longer show the profit.

Begin collection procedures

PPSS will reflect the profit again when the loan (bad check and added fees) is paid off. If the lo666an is not paid off, convert the loan to a higher-risk-loan schedule (Loan Type) or eventually write it off.

If the check is written off, edit the check record and check 'Write Off'.

Tax Consequences: (Verify with your tax advisor.)

If the check was first considered as income, then the NSF check is a bad debt.

If the check was not first considered as income, then nothing is to be done (Cash Method of accounting).

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