Bank Reconciliation and Cashing of Stale Dated Cheque

by Mary
(Toronto, ON, Canada)

Bank Reconciliation and Cashing of Stale Dated Cheque

Bank Reconciliation and Cashing of Stale Dated Cheque

Recently, one of our vendors deposited our cheque in bank which was dated last year and the bank cleared it.

Assuming the bank would consider the cheque stale-dated and therefore not process it, I re-entered that amount in QuickBooks last month to remove the cheque in the outstanding list in my bank reconciliation.

Now I cannot finish my latest reconciliation since this amount has been cleared by me and I am stuck. Any help in this regard will be much appreciated!

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Hi Mary,

Unfortunately, banks no longer scrutinize cheques for dates as part of their processing routine so they often don't catch them anymore. From a bookkeeping perspective, you were correct to reverse the stale-dated cheque.

You just need to use "Write Cheque" to re-issue the cheque using the date the cheque was cashed IF the amount is NOT showing in your Accounts Payable.

If the amount IS showing in your Accounts Payable as outstanding (depends on how you did your reversal), just pay the bill again using date the cheque was cashed.

By using the "cashed cheque" date, you should not be affecting any closed periods. Make sure you put a good memo explaining "your story" and quoting the invoice number.

Does this sound reasonable to you?

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Mar 18, 2012
Stale Dated Cheques
by: Anonymous

How do I remove stale dated cheques manually?

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I discuss how to review a bank reconciliation and how to handle stale dated cheques in my chat on The Monthly Financial Review.

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Nov 13, 2013
Bank Reconciliation and Early Cashing of Post Dated Cheque
by: Anonymous

I wrote a postdated cheque that cleared the bank in the wrong month (cheque was dated Nov 1, cleared the bank on Oct 31).

Do I reconcile on the bank side or the G/L side? Wouldn't be a big deal except our year end is Oct 31 and I can't enter the cheque until Nov.

Nov 13, 2013
Post Dated Cheque Cashed Early
by: Lake

In my opinion, now that the bank has cashed the cheque … even though it cashed it early, the transaction has occurred in your current fiscal year.

If you accounting system doesn't allow you to issue the cheque in the current fiscal year, I'd do an adjusting entry for October 31 to reflect the bank transaction and reverse it out on November 1 when you issue the cheque.

This should balance your bank reconcilaition for year-end and give you a work-around due to the constraints of your accounting system.

Dec 12, 2013
Bank Reconciliation and Bank Service Charges
by: Sharon, Calgary, AB

Once the bank realized they lost the original order for business cheques, they rushed delivered cheques to me. The bank confirmed they will adjust/credit my account for the delivery charge as it was their fault the order was lost.

I have posted the cost of the cheques themselves to the bank charges expense account and the GST to the GST Paid liability account.

Where would you suggest I post the delivery charges? ... to the bank charges expense account as well as it is directly related to the cheques? … or would you post it to the postage expense account?

Dec 12, 2013
Bank Service Charges
by: Lake

Sharon, if it were me, I'd book the original expense to either bank charges OR delivery … your choice.

To book the refund of the delivery charges, I'd book them to an income account for reimbursed / refunded expenses.

If you really don't want to do that, at least charge the refund back to wherever you charged the original expense … in effect zeroing it out.

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