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Clearing old uncleared checks (Q)

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If you have outstanding checks from previous years that have never cleared, and feel confident that they never will clear, what’s the best way of getting rid of them?  You don’t want to void checks from previous years, as that will make your year-end balance different from your beginning year balance, and may cause your CPA to charge you extra to figure it out.

Here’s a simple work-around: 

  1. Instead of voiding a transaction from the previous year, enter a deposit using the current date
  2. Use the same payee, the same amount, and the same expense account as the check you wanted to void.
  3. When you reconcile the bank account clear both the outstanding check and the deposit you created.  Since they “wash” each other, they don’t change the reconciled balance.

About Lillian Aaron

Lillian Aaron is inspired by small and mid-sized businesses. She understands the challenges they face and the tenacity required to build strong, growing organizations. Since 1983, Lillian has worked with businesses as a business process consultant helping them implement and support leading-edge products that drive efficiency and profitability for diverse clients. Her friendly, one-on-one consulting style helps business owners and managers feel at ease when adopting and learning new technology systems.

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