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 Post subject: uncleared checks??
PostPosted: Thu Jun 22, 2006 4:07 pm 
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Joined: Sat Mar 18, 2006 1:38 pm
Posts: 58
There are a few checks that has been on the books for about four-five months now and hasn't been cleared. I would like to get these off the books but how should I do that. Delete? Cancel it out somehow? One of the transaction is a payroll check that has never been cashed.
What to do???


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 Post subject:
PostPosted: Tue Jun 27, 2006 6:52 am 
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Joined: Wed Oct 19, 2005 10:48 am
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Location: Houston, Texas
I do not know if there is a set 'rule' for checks that have not been cleared. Typically what I do is carry them over as outstanding until the end of my fiscal year. If at that time they are at least 6 months old, they may just be voided and written off. If they are not that old, I may just make an entry to move them into another GL account such as Bad Debt Expense or something along that line, depending on what the check is for and what is on your Chart of Accounts. You may also want to get in touch with the payee of the check to make sure that they received it. You do not want a vendor to come back later and say they were never paid. This can damage credit. Someone else may be able to answer this better because I have rarely run into this.

However, regarding payroll checks that have not cleared, I deal with this every year. I do not know if it is different from state to state, but in Texas you are required to send the money to the state comptroller after a period of time. This is considered 'unclaimed' money and is still owed to the employee. It is then kept on record with the state and can be claimed by that employee at any time. You can send an email to the State Comptroller and they will gladly respond or call you with all the details of what to do.

Hope this helps.


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 Post subject:
PostPosted: Tue Oct 10, 2006 2:23 pm 
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No no no. Do not move them to Bad Debt Expense. That has nothing to do with this type of situation. What you do is call the bank and issue a stop payment. When that occurs, you then Dr. Cash and Cr. the account that you hit when the checks were issued.


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 Post subject:
PostPosted: Wed Oct 11, 2006 7:02 pm 
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Joined: Sat Aug 20, 2005 9:05 am
Posts: 899
Location: Minnesota
mfarris1971 wrote:
I do not know if there is a set 'rule' for checks that have not been cleared. Typically what I do is carry them over as outstanding until the end of my fiscal year. If at that time they are at least 6 months old, they may just be voided and written off. If they are not that old, I may just make an entry to move them into another GL account such as Bad Debt Expense or something along that line, depending on what the check is for and what is on your Chart of Accounts. You may also want to get in touch with the payee of the check to make sure that they received it. You do not want a vendor to come back later and say they were never paid. This can damage credit. Someone else may be able to answer this better because I have rarely run into this.

However, regarding payroll checks that have not cleared, I deal with this every year. I do not know if it is different from state to state, but in Texas you are required to send the money to the state comptroller after a period of time. This is considered 'unclaimed' money and is still owed to the employee. It is then kept on record with the state and can be claimed by that employee at any time. You can send an email to the State Comptroller and they will gladly respond or call you with all the details of what to do.

Hope this helps.
federal banking laws state that if a check is not cashed in 6mo the check is void. what you should do is reinstate the original entry with a reversal entry. As far as payroll checks are concerned your correct in stating that the amount should be turned over to the state agency that handles unclaimed funds.


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 Post subject:
PostPosted: Thu Oct 12, 2006 11:15 am 
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Joined: Tue Apr 25, 2006 1:49 pm
Posts: 19
Location: Illinoi
As far as unclaimed property, you really need to check with your state. Some require that ALL uncashed checks be turned over to the state as unclaimed property. There is also a period of time that the checks are outstanding before having to be turned over. Here in Illinois, that period of time is 5 years! What I would suggest if this applies to you, is set 6 months as the mark and if you have a stale-dated check that is over 6 months old, void it and reissue the check. You will want to contact the payee to make sure the check is lost and that there are no discrepancies with the amount. Sorry for the rambling - budget time here! :roll:


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 Post subject:
PostPosted: Fri Oct 20, 2006 12:02 pm 
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Joined: Tue Jan 17, 2006 2:24 pm
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Location: Foxboro, MA
All checks written are considered property of the payee. You must try to contact the payee.

Most states are 3 years before having to turn them over as unclaimed property. So you have atleast 3 years to contact the payee and reissue or void the check if unable to contact the payee.


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