Record unpresented or stale cheques

If you've issued a cheque that hasn't been banked by the recipient, find out how to record the cheque as unpresented in Xero so you can reconcile your bank statement. You can then issue a replacement cheque. This process will preserve the audit trail and reporting history of the transaction.

Record the original cheque as unpresented, no replacement cheque issued

  1. Note account details from the original bill
  2. Create and import bank statement lines.
  3. Reconcile the imported bank statement lines in Xero

Note account details from the original bill

Open the original bill and take note of the amounts, and the accounts in your chart of accounts they were posted to. You'll use this information when you reconcile your imported bank statment lines.

Create and import bank statement lines, no replacement cheque issued

  1. Prepare a bank import CSV file with 2 transaction lines. One line is a receipt, the other a payment.

  2. Enter the following data for each line:

    • Date - use the date on which you are recording the cheque as stale.

    • Description - a short description of the transaction.

    • Amount - the amount of the unpresented cheque. One amount will be positive and the other amount negative. This won't affect the bank statement balance in Xero.

    Image showing CSV file data.

  3. Save your file with a csv file extension. For example, jan13statement.csv.

  4. Import your file into Xero

Reconcile imported bank statement lines

  1. In the Accounts menu, click Bank Accounts.

  2. For the account where you imported the bank statement lines, click Reconcile items.

  3. Find the spent amount transaction you imported. Reconcile it to the original cheque payment.

  4. Find the received amount transaction you imported. Make sure you are on the Create tab.

    Image showing create tab.

  5. Enter the amount and account and details you noted from the original bill. Click Add details if you need more lines.

  6. Click OK or Save Transaction.

Record the original cheque as unpresented, then issue a replacement

  1. Create and import bank statement lines
  2. Reconcile the imported bank statement lines in Xero
  3. Issue and reconcile the replacement cheque

Create and import bank statement lines

  1. Prepare a bank import CSV file with 2 transaction lines. One line is a receipt, the other a payment.

  2. Enter the following data for each line:

    • Date - use the date on which you are recording the cheque as stale.

    • Description - a short description of the transaction.

    • Amount - the amount of the unpresented cheque. One amount will be positive and the other amount negative. This won't affect the bank statement balance in Xero.

    Image showing CSV file data.

  3. Save your file with a csv file extension. For example, jan13statement.csv.

  4. Import your file into Xero

Reconcile imported bank statement lines

  1. Go to your bank reconciliation by selecting Accounts, then Bank Accounts.

  2. For the account where you imported the bank statement lines, click Reconcile items.

  3. Find the spent amount transaction you imported. Reconcile it to the original cheque payment.

    Image showing old cheque reconciled.

  4. Find the received amount transaction you imported. Make sure you are on the Create tab.

    Image showing create tab.

  5. Allocate the receipt to a holding account. You may want to consult your accountant or bookkeeper about which account is right for your business.

    Image showing stale cheque coded to suspense account.

  6. Click OK.

Issue and reconcile the replacement cheque

Create a spend money transaction to record the replacement cheque. Reconcile it to the cheque when it appears in the bank account.

  1. In the Accounts menu, click Bank Accounts.

  2. In the bank account where you made the original payment, select Manage Account, then Spend Money.

  3. Create a direct payment to record the replacement cheque. Use the holding account where you coded the imported bank statement receipt in the previous section.

    Image showing Spend Money transaction to replace stale cheque.

  4. (Optional) Add a note to the spend money transaction to explain that this payment replaces an unpresented payment, and reference the original bill.

    Add notes to transactions and contacts

  5. Issue the replacement cheque to your supplier.

  6. When the cheque appears on your bank reconciliation, reconcile it to the spend money transaction you created.

    Image showing replacement cheque being reconciled.

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