Cheques
Follow every cheque and demand draft from the day it is received until the bank clears it or sends it back.
/accounts/chequesA cheque or demand draft (DD) is recorded as a Payment-In, like any other payment. It takes the amount off what the party owes on the day it is received. It becomes money only once the bank honours it: until then it sits in Cheques in Hand. The Cheques register follows each one from the drawer to the bank, and opens on those still in hand, because somebody has to take them to the bank.
Statuses
A cheque in hand or deposited can instead be marked BOUNCED.
| Badge | What it means | What you can do next |
|---|---|---|
| IN HAND | Received, not yet banked | Deposit, or Bounced |
| DEPOSITED | Paid into a bank. The money is not in that bank's book yet | Cleared, or Bounced |
| CLEARED | Honoured. The money has moved into the bank it was deposited into | Nothing more |
| BOUNCED | Returned unpaid. The whole amount is back on the party's account | Nothing more |
Deposit a cheque
Find it
Open Cheques. The In hand view lists the cheques not yet banked.
Select Deposit
In the Deposit cheque dialog, choose the bank it went into under Deposited into, and the date under Deposited on. Both firms' bank accounts are offered, so you can record a cheque paid into the other firm's bank.
Record it
Select Record deposit. The cheque moves to DEPOSITED.
Depositing only records where the cheque went. The money reaches that bank's book when you mark the cheque cleared.
Mark a cheque cleared
When the bank credits the cheque, select Cleared on it, enter the date under Cleared on, and select Mark cleared. The amount moves out of Cheques in Hand and into the bank it was deposited into.
A cheque must be deposited before it can clear, so you know which bank's book it lands in. If it went into the other firm's bank, both firms' books record the clearing, and the firm holding the money owes it to the other.
Record a bounced cheque
Select Bounced
Bounced is offered on a cheque in hand or deposited.
Fill in the dialog
- Bounced on: the date the bank returned it.
- Why it bounced: required, for example "Insufficient funds" or "Signature mismatch".
- Bank charges to recover (₹): what the bank charged for the bounce. It is added to what the party owes.
Mark it
Select Mark bounced.
What a bounce does:
- The whole amount goes back on the party's account, along with any discount the receipt allowed, and the bills the cheque paid are owed again.
- Any bank charges you entered are added to what the party owes.
- If it was a school's cheque, the rep who looks after the school is notified, with a link to their Dues.
- The receipt stays in the register, marked BOUNCED. There is nothing left on it to cancel or reallocate.
Bank charges can be recovered only on a cheque deposited into this firm's own bank. For a cheque still in hand, or deposited into the other firm's bank, the charges box is not offered.
The register
- Switch between In hand, Deposited, Cleared, Bounced and All. The total at the top is the value of the cheques in the view.
- Search by cheque number, receipt number or party.
- The firm switcher at the top of the page shows one firm's cheques or both firms'.
| Column | What it shows |
|---|---|
| Cheque | The cheque number, "DD" for a demand draft, the bank it is drawn on, and its date |
| From | The party who gave it |
| Receipt | The Payment-In it was recorded on, its firm and date |
| Amount | The amount of the cheque |
| State | Its badge, and what happened: "Not yet banked", or when and where it was deposited or cleared, or when it bounced |
The same Deposit, Cleared and Bounced buttons are also on the receipt's own page.
Good to know
- Bounced is for a cheque the bank returned. A cheque recorded by mistake is not a bounce: cancel its receipt on Payment-In instead.
- A cancelled receipt's cheque is not on this register. It stays on Payment-In.
- Clearing and bouncing are dated. You can't date either on or before the day the firm's books are closed after a GST filing (see Setup).
- Cash & Bank shows the total of the cheques received and not yet cleared as Cheques not yet banked. The Cash flow report counts a cheque when it clears.
- The Accountant (read-only) sees the register and the states but not the buttons.
Related
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Collections to confirm
Check the money reps say they collected on visits against the bank or the cash, then confirm it as a Payment-In or mark it not received.
Returns to credit
Price and raise the credit notes for books a school or trade party sent back to the warehouse, or take the books back without one.