Handling Returned and Post Dated Checks

Returned checks

When the bank notifies you that it is returning a customer’s check for NSF (not sufficient funds), debit the customer’s account immediately—even if you plan to redeposit the check the same day.

For good internal controls, instruct your bank to address all returned checks to someone other than you—possibly the owner or a senior manager. This can protect you if an employee tries to use fictitious checks to cover temporary shortages.

Postdated checks

If a customer gives you postdated checks, treat them as a note receivable. In other words, debit it to Notes Receivable, not to Cash.

On the date written on the check, deposit it to your firm’s account, debiting Cash and crediting Notes Receivable.


Popular posts from this blog

How to "Un" Apply Credits In QuickBooks

Employee Salary/Wage Rate Report

Qbb, Qbm, Qbx, or Qbw - What's the Difference?