Uncleared Cheques and Bank Tagging

The other thing you can do is create a “cheque holdings account”. This is just a type of bank account used to track presented but uncleared cheques.

So effectively as soon as you send the cheque you can mark the invoice as paid, but instead of paying it from the current account you would pay it from the cheque holdings account. Now that cheque holdings account is overdrawn, when the cheque payment finally appears on your current account you then just tag it as a transfer to the cheque holdings account, netting off the balance.

The cheque holdings account works for both cheques paid and cheques received, it allows you to mark any invoice as paid immediately and to track any uncleared cheques later down the line.

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