Trust Accounting - How to Reverse a Check or Receipt

How to Reverse a Trust Check or Receipt

Once an item has been posted, it cannot be altered. In order to make a change to a posted item, it must be reversed and re-entered. A reversal does not delete a posting but rather creates a counter transaction. The counter transaction ensures that an audit trail is maintained.

A trust receipt cannot be reversed if the end result is that it will overdraw the trust account. If this is the case, first enter the new trust receipt, then reverse the incorrect trust receipt. Alternately, first reverse any trust checks, then reverse the receipts in order to keep the account from being overdrawn.

To reverse a trust check or receipt:

Select the Trust module > Ledger tab
Enter the File Number and click OK
Double-click the item to be reversed to view the detail:

Select Reverse Transaction from the Special menu along the top of the screen:

Date the reversal the same date as the original posting date, enter a reason and click OK.

IMPORTANT! If the item to be reversed was posted in a period for which a bank reconciliation has been completed, the reversal date should not be the same as the original transaction date. This will cause an imbalance in the previous bank reconciliation. In this case, the reversal should be dated using the current date.