What are an Unpresented Cheques?
Unpresented cheques are cheques which have not yet cleared through the banking system. It is a term used in the preparation of a bank reconciliation statement.
For example, if a business writes a cheque, it will post it to its cash book that day and then send it on to its supplier. The supplier will receive the cheque days later, and send it on to its bank. The cheque then passes through the banking system and eventually, a few more days later, it is processed by the bank of the business and posted to its account (bank statement).
The period of days between the business posting the cheque and the bank posting the cheque results in items in the cash book not on the bank statement and therefore they form a key component of any bank reconciliation procedure. These cheques are normally referred to as unpresented cheques or outstanding checks.
It is important for the business to keep track of unpresented cheques using the bank reconciliation, as sufficient funds must be maintained in the bank account to cover the cheques as and when they are presented for payment.
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.