How To: Void an Employee Check
Pay Statements that have recorded on an employee can be voided under specific circumstances. NACHA (National Automated Clearing House Association ) has reversal rules that must be followed for all payment reversals.
NACHA Reversal Rules
A reversal can only be processed if the payment meets one of these criteria:
- Duplicate payment
- Incorrect payment recipient
- Incorrect payment amount (wrong dollar value)
- Payment date earlier than intended (ACH debit only)
- Payment date later than intended (ACH credit only)
Timeframe:
- Must be completed within 5 banking days of the settlement date.
- Reversing entry must be transmitted within 24 hours of discovering the error.
Other Requirements:
- Reverse the entire payment amount (no partial reversals).
- Make a reasonable attempt to notify the recipient no later than the reversal settlement date.
Void Pay Statement
If the pay statement you are reversing meets the criteria above, it can voided in the system.
If voiding a paper check, confirm the original check has not been cashed
Navigate to the Payroll Processing screen and click on the Payroll Prep icon for the payroll date.
Select View Pay Statements in the Add/Edit Pay Statements Payroll Prep step. Do not Initiate Payroll or Sync Time
Select New Pay Statement
Create a new pay statement using the Void Pay Statement Type
The next screen will display the finalized checks. You will select the Pay Statement to Void:
Click the checkbox icon
Confirm the void
If the check to be voided was originally paid as a Direct Deposit, the system will void the direct deposit and withdraw this amount from the employee's account. To block the ACH withdrawal from the employee account, in the pay statement click the Utilities button on the pay statement
Select Void Options
Click Block Direct Deposit Reversal to prevent the voided check from being withdrawn from the employee's account.
See Also: How To: Enter a Manual Check
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