{"id":137276,"date":"2026-05-05T14:53:55","date_gmt":"2026-05-05T14:53:55","guid":{"rendered":"https:\/\/docs.daftra.com\/user_manual\/%d9%83%d9%8a%d9%81%d9%8a%d8%a9-%d8%a7%d9%84%d8%aa%d8%b9%d8%a7%d9%85%d9%84-%d9%85%d8%b9-%d8%a7%d9%84%d8%b9%d9%87%d8%af%d8%a9-%d8%b9%d9%86%d8%af-%d9%88%d8%ac%d9%88%d8%af-%d8%b1%d8%b5%d9%8a%d8%af-%d9%85\/"},"modified":"2026-05-14T11:45:52","modified_gmt":"2026-05-14T11:45:52","slug":"handling-a-custodian-with-a-remaining-balance","status":"publish","type":"user_manual","link":"https:\/\/docs.daftra.com\/en\/user_manual\/handling-a-custodian-with-a-remaining-balance\/","title":{"rendered":"Handling a Custody with a Remaining Balance"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]<\/p>\n

When an employee custodian has a remaining balance that cannot be fully settled, the system provides two options: returning the cash<\/strong> or recording the balance as a bad debt<\/strong>. This guide explains both options and how to reverse them if needed.<\/p>\n

[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Option 1: Returning the Cash” font_container=”tag:h2|font_size:28|text_align:center|color:%2304306b|line_height:2″ use_theme_fonts=”yes” css=”.vc_custom_1778751177872{margin-left: 200px !important;background-color: #f6f9fc !important;border-radius: 4px !important;}”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n

If the employee returns the remaining balance in cash, record it as follows:<\/p>\n

    \n
  1. From the main menu, click Finance<\/strong>.<\/li>\n
  2. Click Employee Custody<\/strong>.<\/li>\n
  3. Open the relevant custody from the list.<\/li>\n
  4. Verify the remaining balance shown on the custody page.<\/li>\n
  5. Click the Return Cash<\/strong> button.<\/li>\n
  6. A confirmation message will appear: “Are you sure you want to settle the full remaining balance of this employee’s custody?”<\/em><\/li>\n
  7. Click Confirm<\/strong>.<\/li>\n<\/ol>\n

    Once confirmed, the system automatically creates a journal entry transferring the remaining balance from the employee custody account to the designated cash or bank account, and the custody status changes to Settled<\/strong>.<\/p>\n

    [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]\"\"[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text][\/vc_column_text][vc_column_text]\"\"[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_message message_box_style=”3d” message_box_color=”sky” icon_fontawesome=”fas fa-book”]<\/p>\n

    Once confirmed, the system automatically creates a journal entry transferring the remaining balance from the employee custody account to the designated cash or bank account, and the custody status changes to Settled<\/strong>.<\/p>\n

    [\/vc_message][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Reversing a Cash Return” font_container=”tag:h3|font_size:22|text_align:right|color:%2304306b|line_height:2″ use_theme_fonts=”yes” css=”.vc_custom_1778755634469{margin-left: 120px !important;}”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n

    If the custody was closed after a cash return and you need to undo it:<\/p>\n

      \n
    1. From the closed custody’s view page, click Change Custody Status<\/strong> and select Undo Close<\/strong>.<\/li>\n
    2. A confirmation message will appear: “Are you sure you want to undo the closed status? The custody will be restored to its previous state.”<\/em><\/li>\n
    3. Click Confirm<\/strong>.<\/li>\n<\/ol>\n

      [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]\"\"[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_message message_box_style=”3d” message_box_color=”sky” icon_fontawesome=”fas fa-book”]<\/p>\n

      Upon reversal, the cash return journal entry is automatically deleted, the remaining balance is restored to the employee custody account, and the custody status returns to Open<\/strong>.<\/p>\n

      [\/vc_message][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Option 2: Recording the Remaining Balance as a Bad Debt
      \n” font_container=”tag:h2|font_size:28|text_align:center|color:%2304306b|line_height:2″ use_theme_fonts=”yes” css=”.vc_custom_1778756219284{margin-left: 200px !important;background-color: #f6f9fc !important;border-radius: 4px !important;}”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n

      If the remaining balance cannot be recovered from the employee, you can write it off as a bad debt:<\/p>\n

        \n
      1. From the open custody’s view page, click on Custody Status<\/strong> and select Bad Debt<\/strong>.<\/li>\n
      2. A confirmation message will appear: “Are you sure you want to record this custody as a bad debt?”<\/em><\/li>\n
      3. Click Confirm<\/strong>.<\/li>\n<\/ol>\n

        [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]\"\"[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]\"\"[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_message message_box_style=”3d” message_box_color=”sky” icon_fontawesome=”fas fa-book”]<\/p>\n

        The full remaining balance is automatically transferred to the bad debt account under other expenses, and the custody becomes read-only<\/strong>. You can review the related journal entries from the Transactions<\/strong> tab on the custody page.<\/p>\n

        <\/h4>\n

        [\/vc_message][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Reversing a Bad Debt” font_container=”tag:h3|font_size:22|text_align:right|color:%2304306b|line_height:2″ use_theme_fonts=”yes” css=”.vc_custom_1778756814064{margin-left: 120px !important;}”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n

        If a custody was incorrectly recorded as a bad debt, you can reverse it:<\/p>\n

          \n
        1. From the custody’s view page, click on Custody Status<\/strong> and select Reopen<\/strong>.<\/li>\n
        2. A confirmation message will appear: “Are you sure you want to undo the bad debt status? The remaining balance will be restored to the employee advance account.”<\/em><\/li>\n
        3. Click Confirm<\/strong>.<\/li>\n<\/ol>\n

          [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]\"\"[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]\"\"[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_message message_box_style=”3d” message_box_color=”sky” icon_fontawesome=”fas fa-book”]<\/p>\n

          The bad debt journal entries are automatically deleted, the balance is restored to the employee custody account exactly as it was, and the custody status returns to Open<\/strong>.<\/p>\n

          [\/vc_message][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Comparison Between the Two Options
          \n” font_container=”tag:h2|font_size:28|text_align:center|color:%2304306b|line_height:2″ use_theme_fonts=”yes” css=”.vc_custom_1778757408728{margin-left: 200px !important;background-color: #f6f9fc !important;border-radius: 4px !important;}”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n\n\n\n\n\n\n\n\n
          <\/th>\nReturn Cash<\/strong><\/th>\nBad Debt<\/strong><\/th>\n<\/tr>\n<\/thead>\n
          When to use<\/strong><\/td>\nWhen the employee returns the balance in cash<\/td>\nWhen the balance cannot be recovered<\/td>\n<\/tr>\n
          Journal entry<\/strong><\/td>\nTransferred to the cash or bank account<\/td>\nTransferred to the bad debt account<\/td>\n<\/tr>\n
          Custody status after<\/strong><\/td>\nSettled<\/td>\nBad Debt<\/td>\n<\/tr>\n
          Reversible<\/strong><\/td>\nYes, via Undo Closing<\/td>\nYes, via Reopen<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

          [\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/section>","protected":false},"author":17,"template":"","categories":[2118,2108,9541],"tags":[],"class_list":["post-137276","user_manual","type-user_manual","status-publish","hentry","category-finance","category-accounting","category-employee-custody"],"yoast_head":"\nHandling a Custody with a Remaining Balance - Daftra Knowledge Base<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/docs.daftra.com\/en\/user_manual\/handling-a-custodian-with-a-remaining-balance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Handling a Custody with a Remaining Balance - Daftra Knowledge Base\" \/>\n<meta property=\"og:description\" content=\"[vc_row][vc_column][vc_column_text] When an employee custodian has a remaining balance that cannot be fully settled, the system provides two options: returning the cash or recording the balance as a bad debt. 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