What Is an Outstanding Check? Outstanding Checks 101

They are key components of transactions involving payments or transfers. This documentation will come in handy if you need to prove to state regulators that you made reasonable attempts to complete the payment. If an outstanding check is cashed after you asked a bank to stop the payment, you will be responsible for proving that you took the necessary steps to complete the payment. Call or email payees who fail to deposit checks and ensure that the check was, in fact, received.

Outstanding checks are important in the reconciliation of a company’s bank statement. Checks that are outstanding for a long period of time are known as stale checks. In the U.S., outstanding checks are considered to be unclaimed property and the amounts must be turned over to the company’s respective state after several years. The payor must be sure to keep enough money in the account to cover the amount of the outstanding check until it is cashed, which could take weeks or sometimes even months. If an outstanding check from the previous month did not clear the bank account in the current month, the check will remain on the list of outstanding checks. As a result, the bank reconciliation for the current month will again show the outstanding check amount as a subtraction from the bank statement balance.

How Many Checking Accounts Should You Have?

If the outstanding check is less than six months old, you should not write another 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 outstanding check definition to ask them to return the check to you and you can pay them using another method. There are actually some benefits to have checks outstanding as well, though. Writing checks makes it possible for organizations and individuals to make payments without requiring instantaneous cash or electronic transactions to be completed.

• In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies.
• 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.
• Additionally, banks typically charge fees when a stop order is issued, so before taking this action it’s important to confirm the related fees.
• It’s common to have differences between the amount recorded in the general ledger and the bank statement, but these differences should be accounted for in the reconciliation.
• Alternatively, you can contact your bank directly with the check number and ask them to confirm.

You can read more about our editorial guidelines and our products and services review methodology. If you wrote a check and it has been outstanding for a while, you may be wondering, “Do checks expire? ” They do expire and that’s why it’s important to record the date you wrote the check. 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.

What Is an Outstanding Check?

Cash deposits and transfers from another Wells Fargo account are immediately available for your use. An outstanding check is a check that a check writer has issued and recorded in their accounting system, but which has not yet been deposited or cashed by the recipient or cleared by the bank. Once the deposits in the business records is matching with those in the bank statement, there is a uniform account details. To remedy these situations quickly, be proactive with outstanding checks. In conclusion, outstanding checks can pose risks to your financial stability if not properly managed. Stay proactive in tracking and reconciling your accounts, communicate with recipients, and leverage the benefits of online banking tools.