Stale-Dated

Last week we talked about using a spreadsheet to keep track of the accounting for a smaller non-profit. This week let’s talk about a common bookkeeping challenge you might face when working on your non-profit’s accounts, the stale-dated cheque.

Regardless of the bookkeeping method you choose, watching a cheque sit on your books, uncashed for many months can cause stress and frustration. Most banks have a date after which, a cheque is considered stale-dated and can’t be cashed.

So, imagine my surprise last week, when I was working on my monthly bank reconciliation, and there on the bank statement was a cheque processed through our account, but was written 18 months prior.

Its hard to create a policy for stale-dated cheques as each situation is usually unique. Sometimes the payee simply forgot to deposit the payment. Sometime the payee moves, and the cheque is lost in the paperwork of the move. Sometimes it is just a mystery.

I generally monitor monthly, through my back reconciliations, for any cheque that has been sitting uncashed for a little too long. A phone call might help to encourage the person to get the payment in the bank or learn if a new payment needs to be re-issued.

If a cheque sits on our books for too long and I can’t reach the payee, then I start the process for writing it off. This is best done with a little advise from an auditor, so I won’t get into the exact how-to details, but the overall concept is to cancel the payment, and assign the funds back to the correct account code for spending elsewhere.

Its nice to balance the whole process with the time of year, so that you can clean up your books before the annual audit.

My experience with this payment was a true first. I’ve never had a cheque written, then left uncashed, and finally written off, only to have to re-create the paperwork to process the payment 18 months later! The things we learn in a non-profit.

Its nice to balance the whole process with the time of year, so that you can clean up your books before the annual audit.

Sure, I could have phoned the bank and asked them to reverse the payment because it was so dated, but the truth was, the amount was small, we had the funds, and it was just as easy to let it go through our account than to fight it.

These days, it seems like most payments are made electronically, and in fact we are doing that more and more. But the good old non-profit, still relies on the standard two-signature paper cheque, at least for now.

I hope you’ve found these ideas helpful. What bookkeeping surprises have you experienced? Let me know. 😊

-Christie

…

Hi, I'm Christie Saas, former board member, current Executive Director, and non-profit volunteer. I remember well, those early years when I lacked the training, the confidence, and the work-life balance to focus on becoming the best non-profit leader I could be.

Fast-forward past many bumps in the road, lessons learned, and you’ll find me still in the trenches, but a little wiser, a little calmer, and a whole lot happier. I love my work and I want to help you love yours too.

I created ChristieSaas.com to give you tools, tips, and templates to remove the mystery of learning to run a small non-profit. If you’re a brand-new non-profit leader, or a little more seasoned, someone who’s looking to make a meaningful contribution and still have time for a full life away from the job, you’re in the right place.

© Christie Saas 2021 All Rights Reserved

...

Want to learn more?
Start with one of my free resources.

FREE Guides