What is an outstanding check?

The original check is still valid, and the payee can cash or deposit it. It’s fine to contact the recipient after a few weeks to find out if they’ve lost the check or when they plan on cashing it. If they can’t get to the bank, you may want to ask them to return the check to you and you can pay them using another method. To adjust your records for outstanding deposits, subtract the outstanding deposit from your books. That said, it is possible for the issuing party to request a stop order from their bank, which would void the check that was issued. Additionally, banks typically charge fees when a stop order is issued, so before taking this action it’s important to confirm the related fees.

With banking activity becoming increasingly electronic, another way to avoid writing a check and forgetting about it is to use the checking account’s online bill pay service. This should provide real-time information about the total dollar amount https://www.bookstime.com/articles/outstanding-checks of checks outstanding and the total dollar balance present in the account. You can also call or write to remind the payee that the check is outstanding. If they haven’t received the payment, this may nudge them to notify you to reissue the check.

Is Outstanding Checks Part of Cash?

Recording it in your register right away reminds you that those funds are earmarked for that check. You can tell if a check is outstanding by reviewing your online bank account. From there, you can confirm whether or not the check has been processed. Alternatively, you can contact your bank directly with the check number and ask them to confirm. Lastly, you can contact the recipient of the check and ask them to confirm whether they have deposited or cashed the check.

Any deposits that are in the process of being made but don’t show up on the bank statement will still be reconciling items that need to be looked into with the bank. Outstanding checks are those that have been written and recorded in the business’s cash account but have not yet been cleared by the bank. Once the check is deposited by PaperMills Co. and cleared by the bank on August 2, 2023, it is no longer considered outstanding.

Terms Similar to Outstanding Check

When the payee deposits the check at a bank, it requests the funds from the payor’s bank, which, in turn, withdraws the amount from the payor’s account and transfers it to the payee’s bank. When the bank receives the full amount requested, it deposits it into the payee’s account. Adjust the balance on the bank statements to the corrected balance. By doing this, however, you must add deposits in transit, remove outstanding checks and add/deduct bank errors. Once the deposits in the business records is matching with those in the bank statement, there is uniform account detail.

If you want to learn more about how to handle ripped or damaged checks, you can check out our online resource that can provide helpful information and guidance. If you want a basic checking account with no monthly maintenance fee, or an interest-earning checking account, we’ve got the options that are right for you. These non-editable fields display the bank abbreviation and description,
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screen. In most cases, the debts of a person who has died are paid by their estate. Usually, a debt won’t be paid if there is no money or property left.

Difference Between Outstanding Checks & Outstanding Deposits

If you write a check and the money never leaves your account, you may develop the false belief you can spend those funds, but the money still belongs to the payee. If the payee finally deposits the check after months of delay, you risk overdrawing your account and bouncing the check. Bouncing an outstanding check can lead to financial consequences, such as fees imposed by the bank, damage to your credit rating, and potential legal actions from the payee. Be mindful of what outstanding checks you’ve written before drawing down your bank balance. Forgotten outstanding checks are a common source of bank overdrafts. One way to avoid this occurrence is to maintain a balanced checkbook.

An outstanding check refers to a check that has not yet been deposited or cashed by the recipient. An outstanding check is a check that a recipient fails to deposit. Once such checks are finally deposited, they can cause accounting problems. Furthermore, checks that are never cashed may constitute “unclaimed property” that must be eventually be turned over to the state. If a check was issued to you and it’s still outstanding after six months, contact the check issuer and request a replacement.