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The definition of an outstanding check is a check that has been written, but it hasn’t been cashed-deposited by the bank, or otherwise cleared the bank. The Outstanding Checks report lists any outstanding checks that have not cleared the bank.
The payment goes on the general ledger, but businesses must make adjustments during reconciliation, and they may need to reissue stale checks. Sometimes a payee forgets about the check or loses it without notifying the payor. The payor has no control over when the payee will cash or deposit the check. The only thing the payor can do, for a fee, is stop payment on the check.
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It may be necessary to issue a new Outstanding Checks without getting the old check back if the original check was lost or destroyed. This presents a thorny situation—two checks might be circulating for a single payment. If the old check is deposited, your bank might honor it, and you could consequently end up paying double. Individuals can reduce surprise withdrawals in personal accounts by using online bill payment instead of issuing paper checks. Reconciliation is an accounting process that compares two sets of records to check that figures are correct, and can be used for personal or business reconciliations. 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. Explain why a cash flow statement is needed in addition to the balance sheet and income statement.
A https://www.bookstime.com/ is a financial instrument that authorizes a bank to transfer funds from the payor’s account to the payee’s account. 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. 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.
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This may present the false notion that there is more money in the account available to be spent than there should be. If the payor spends some or all of the money that should have been held in reserve to cover the check and then said check is later cleared, the account ends up in the red. When this happens, the payor will be charged an overdraft or non-sufficient funds fee by the bank, unless the account has overdraft protection. Abandoned Property Law §1422 requires New York State to perform certain payee notification requirements for uncashed checks. OSC performs the outreach for refunds issued out of the Comptroller’s Refund Account and for payroll checks. The Department of Tax and Finance Treasury performs the outreach for Vendor, Employee Expense and SSI/SSP checks issued out of the General Checking account. Business Units are responsible for performing the outreach for all checks issued out of their agency sole custody accounts.