In this post, you’ll learn post dated check in bank reconciliation.
As you’re working on your monthly bank reconciliation, you come across postdated checks.
First, let’s break down what postdated checks are.
They’re checks given to payees with future dates, meaning they can’t be cashed until that date arrives.
Now, when dealing with postdated checks in your reconciliation, here’s what you should do: set them aside for the time being.
Since they’re not valid for deposit until the specified date, you’ll need to wait until then to include them in your reconciliation.
Keep a close eye on the calendar to ensure you don’t overlook the postdated checks when the right time comes.
This way, your reconciliation stays accurate, reflecting the actual funds available in your account.
Does it affect bank reconciliation?
Simply put, post-dated checks won’t impact your bank reconciliation initially.
This is because they aren’t logged until the date mentioned in the check.
The reason behind this is straightforward: check payments are only entered into the records on the same day as the check date.
Yet, some accounting systems provide flexibility, allowing bookkeepers to input transactions on future dates to prevent mistakes in handling post-dated checks.
Not all systems, however, permit this.
Taking a closer look, the only scenario where post-dated checks matter in bank reconciliation is when they clear the bank before being recorded in your company’s cash book.
This situation arises when the payees deposit the check on or after the post-dated date.
Consequently, in your bank reconciliation, these checks will appear as unrecorded.
Handling post-dated checks in bank reconciliation
As mentioned earlier, post-dated checks don’t impact bank reconciliation.
However, if they clear without being recorded, they become reconciling items.
These need inclusion in the book reconciling items, serving as deductions.
If you’re unaware that unrecorded check issuances are post-dated, two options exist.
First, check your registers in the check stubs for check numbers and dates, confirming if they are indeed post-dated checks.
Once confirmed, advise the accountant to make adjustments and record these checks.
Alternatively, consult the post-dated check receipt, a document documenting the issuance of post-dated checks to payees.
Treatment in bank statement
When post-dated checks clear, they’re debited in the bank statement, treated like any other checks.
The only hiccup is if outstanding checks weren’t logged in the company’s books, causing a shortfall since the company assumed it still had funds.
Challenges that may arise
Handling post-dated checks during bank reconciliation can pose certain challenges.
For instance, if a company issues post-dated checks spanning multiple months or even years, it becomes necessary to consistently identify any unrecorded check issuances.
This additional task, beyond the routine reconciliation of cash books, arises if the bookkeeper forgets to record these checks promptly.
Consequently, there’s a need to compile and review these post-dated checks each month during the bank reconciliation process, which can be quite labor-intensive.
To streamline this process and minimize the likelihood of oversight, a practical solution is to suggest to the accountant the implementation of a monthly checklist.
This checklist should be completed before closing the books of accounts, serving as a preemptive measure to ensure that post-dated checks are recorded promptly upon their maturity date.
This approach can enhance the efficiency of the reconciliation process and prevent the need for repetitive and time-consuming verifications each month.