Returned Items (60.2.3)
  • 02 Apr 2024
  • 10 Minutes to read
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Returned Items (60.2.3)

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Article summary

Business Process Overview

Suppose checks, credit card payments, and Automated Clearing House (ACH) payments deposited are returned by the bank (e.g., insufficient funds, credit card disputes, or closed accounts). In that case, a Debit Memo is systematically generated. Returned items are recorded in Florida PALM to reduce the cash balance in an agency default fund. A Direct Journal Deposit updates the default fund to the appropriate fund through a $0 deposit reclass entry. Agencies notify customers through their normal process to collect outstanding balances.

Business Process Diagram

Business Process Diagram for 60.2.3 Returned Items

Business Roles

The Business Process Flow Diagrams use horizontal swim lanes to depict where different parties or systems perform activities. Each swim lane is titled with a role, either agency-based or within DFS, and in some cases, is representative of an external entity or system. The swim lanes may change from page to page within a single business subprocess as more or fewer roles are required to execute sections of the business subprocess. 

Business Process Flows Details

The tables below describe steps in each business subprocess as reflected on the Business Process Flow Diagrams. The tables also reflect information associated with each step, describing the intent of the specific process. Florida PALM screenshots are included within the sections to allow connections to be made from specific business subprocess steps to screens within Florida PALM. This information should be read in conjunction with the Business Process Flow Diagrams.

Process Step ID

Process Step Title

Description of Process

1

Inbound Returned Items (ARI033, ARI022)

The Bank or 3rd Party (e.g., NIC) provides returned item interface files to Florida PALM. Returned items include returned checks, EFT/ACH returns, credit card chargebacks, and credit card chargeback reversals.


2

Perform Interface Error Checking

Edit validations are performed on each interface before the data is allowed to load to the AR module. If the file is rejected, all transactions in the file are rejected, and the file must be resubmitted once the issue is resolved.


If the file is not rejected, edit validations are performed on each transaction before the data is allowed to load for processing in the AR module. Additional edits will be performed during the transaction life cycle.


Rejected transactions are managed through the 120.1 Interface Error Handling Process.


Edit Validations include:

  • ChartField Validation
  • Amount Validation
  • Open Period Validation


3

Load Returned Items Data

Data passing the initial edits is interfaced and loaded into the AR module.


4

Load and Create Direct Journal Deposit

Florida PALM loads and creates the returned item deposit as a Direct Journal Deposit to the agency’s default accounting ChartField values. Treasury maintains default ChartField values for Returned Items by configuring Distribution Codes.


Figure 10 provides an example of the Deposit Control Page, Totals Tab, where deposit information is displayed.


Figure 11 provides an example of the Distribution Code page where the default accounting is configured.


Figure 12 shows the Modify Accounting Entries Page, Directly Journalled Payments Tab, where accounting information is displayed.


Florida PALM systematically reconciles the agency’s deposit entry to the corresponding bank deposit data to confirm the deposit details match. Florida PALM provides bank deposit data from the 70.2 Manage and Reconcile Bank Statements business process.


5

Review Unreconciled Bank and Deposit Trans.

The DFS CM Bank Reconciliation Processor monitors and reviews unreconciled bank and deposit transactions related to returned items. There are scenarios where Treasury contacts banks or 3rd parties for assistance with the returned items.


6

Semi Manual Reconciliation

In some scenarios, the DFS CM Bank Reconciliation Processor must intervene and complete a manual reconciliation (e.g., Semi Manual Reconciliation) for the returned items to proceed in the transaction lifecycle.


7

Run Edit Check

The Edit Check process will run at the designated interval. The edit check process will validate that ChartField values are active, validate combination edit rules applicable to the transaction (i.e., does the transaction reflect an accurate Budget Entity to State Program correlation), and validate that the accounting period is open.


8

Resolve Edit Errors

Edit errors must be resolved before the transaction proceeds. The DFS AR Deposit Processor reviews the error to determine the action needed. If the DFS AR Deposit Processor cannot resolve the error, the Edit errors must be resolved before the transaction proceeds. The DFS AR Deposit Processor reviews the error to determine the action needed. If the DFS AR Deposit Processor cannot resolve the error, they will work with the applicable agency to resolve (i.e., update invalid distribution code).


9

Run Budget/Cash Check

Returned Item deposits Budget Check process will run at the designated interval to decrease the revenue balances. Revenue Budget Check is set to systematically pass when revenue Account values are present on a transaction to allow revenue to post regardless.


Returned Item deposits Cash Check process will run at the designated interval to confirm using valid ChartFields and decrease the spendable cash balances.


When a Returned Item deposit passes the Budget and Cash Check with no exceptions, the transaction lifecycle will proceed.


10

Manage Cash Exceptions

The transaction will fail if the Returned Item deposit exceeds the spendable cash balance. Transactions with errors stop at the cash-checking stage and do not proceed until the error is corrected or overridden by DFS. Please see 20.2 Budget Execution and Management for more information.


Cash check errors continue to be systematically checked until they are resolved.


11

Update Ledger Balances

The applicable revenue, budget, or cash ledgers will be updated upon passing the Budget and Cash Check. Please see 20.2 Budget Execution and Management for more information.


12

Generate GL Journals

Journal Generator (JGEN) processes posted accounting entry data from the Florida PALM source modules, summarizes the data, and creates journals in the General Ledger. The Journal Generator process will edit Budget Check and post the journal entries created during the process. Please see 10.2 Enter and Process Journals for more information on source module journal entries.


13

Export Returned Items Data

Florida PALM exports agency-specific Returned Items data.


14

Outbound Returned Items Data (ARI020)

An interface containing returned item details is sent to Agency Business Systems from Florida PALM.


15

Analyze Returned Item Data

Returned item data is analyzed through reports for collection purposes and to reclass default accounting entries, if needed.



Research and Find Original AR Item
If a returned item is related to a customer AR item, the Agency AR Item Processor researches and identifies the original payment associated with the returned item to confirm accuracy for updates to accounting and the customer balance.


Create Credit to Original AR Item
For a returned item related to a customer AR item, the Agency AR Item Processor uses a Maintenance Worksheet to create a credit item to update the balance of the original item. After posting the credit item, the balance of the original item will be a negative or credit balance. The credit entry is needed to update/reverse the recognized revenue from the original AR item. Please see 60.1.1 Record AR for more information on creating AR items.

18

Create $0 Deposit

If the returned item is related to a Customer AR item, the Agency AR Deposit Processor will create a $0 deposit. For example, Payment 1 reverses the default returned item accounting from the direct journal payment created from the bank file. Payment 2 is for the credit item created in the previous step (Credit to Original AR Item step 17) which will reverse collected revenue from the original item payment. Select the Payment Predictor checkbox on Payment 2 to systematically apply the payment to the item.


Please see the 60.2.2 AR Deposits business process for more information on applying payments related to AR items and customers.

19Create New AR Item with Fees
If the agency tracks returned items to a customer, create a new item for the original amount the customer owes and the additional amount for fees and interest, if applicable. The Due Date field can be used on the new AR item to retain the aging from the original AR item. Please see 60.1.1 Record AR for more information on creating AR items.

Deposit Control Page, Totals Tab

Deposit Control Page, Totals Tab

Distribution Code Page

Distribution Code Page

Modify Accounting Entries Page, Directly Journalled Payments Tab

Modify Accounting Entries Page, Directly Journalled Payments Tab

Accounting Events

Accounting events originate during transaction processing in the applicable source module. The accounting events impact the source module, Commitment Control ledgers, and the General ledger (Actuals).

  • Source Module accounting entries require user input (I) of the primary line (i.e., expenditure, revenues) with an automated (A) system offsetting line (i.e., payable, receivable) during transaction entry. The source model transaction must pass Edit Check, Budget Check, and Cash Check (on applicable entries) before posting the transaction.
  • If the transaction passes the budget check process, the Run Budget Check (Commitment Control) process automatically affects balances in the appropriate budget ledger (i.e., Appropriations, spendable cash).
  • After the transaction is posted in the source module, an automated system process summarizes and posts the entries in the General Ledger module to the Actuals Ledger

The table below provides the most common accounting events applicable to this business process.

Acct Event ID

Accounting Event

Commitment Control Ledger(s) Impact

Source Module Accounting Entry

General Ledger (Actuals) Entry

AR02

Revenue Deposit Returned Item or Bank Adjustment

Decreases Collected Revenue Balance, Decreases Spendable Cash Balance

Debit: Revenue (U)

Credit: Cash (S)

Debit: Revenue

Credit: Cash

Reports

Key Reports are displayed as icons with the Report Number on the Business Process Flow Diagrams. The table below provides the reports identified to be produced at a particular process step or is used to support the completion of a process step.

Report Number

Report RICEFW ID

Report Description

Report Source

Report Frequency

Audience

R2

ARR021

Unreconciled Deposits Report – A report that provides a list of unreconciled deposits. Report includes unreconciled bank data to assist with deposit entries that are needed in the system for reconciliation.

PeopleSoft

Periodic

Agency, DFS

R3

ARR007

Deposit Report – A report that provides detailed information for deposits. 

PeopleSoft

Periodic

Agency, DFS

R6

KKR058

Budget and Cash Checking Exceptions Report – A report that lists budget and cash check exceptions, balances, vouchers with errors and budget exceptions, and vouchers where an override was applied.

PeopleSoft

Periodic

Agency, DFS

R8

ARR024

Debit Memo – A report that provides returned item information (includes image for returned checks).

PeopleSoft

Periodic

Agency, DFS

Note: A complete list of reports may be found in the Reports Catalog.

Interfaces

The table below provides the Interface IDs for each interface identified on the Business Process Flow Diagrams.

Interface Number

Interface Description

Interface Frequency

Source

Target

ARI020

Outbound Returned Items Data – Outbound interface file that provides returned item data, including images, to agencies.

Daily

Florida PALM

Agency Business Systems

ARI022

Inbound Returned Item Check Data – Inbound interface file that provides returned item check data, including images.

Daily

Bank

Florida PALM

ARI033

Inbound ACH NOC and Return Deposit Data – Inbound interface from NIC that provides ACH returned and ACH details related to customer drafts requiring banking information changes.

Daily

Bank

Florida PALM

Note: A complete list of interfaces may be found in the Interface Catalog.

Forms

The table below provides the Form Numbers for any forms identified on the Business Process Flow Diagrams.

Form Number

Form Description

Audience

N/A



Workflows

The table below provides the Workflow Numbers for any workflows identified on the Business Process Flow Diagrams.

Workflow Number

Workflow Description

Audience

N/A



Version History

Date

Revision Description

12/01/2023

Original Version

02/08/2024Added Agency AR Item Processor role. Updates for Customers and Items. Updated images. Added ARR025.
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