A pending check is a valid check that has not yet been deposited or cleared. It can take several days for funds to be deducted from the account of the person or company that wrote it. Outstanding checks can be tracked using accounting measures, and may need to be voided after a set period of time.
A pending check is a valid check that has been written and presented to the payee, but has not yet been deposited or cleared. It can take several days from the time a check is written to the time funds are deducted from the account of the person or company that wrote it. There are various accounting measures used to track outstanding checks so that financial accounts can be kept accurate and up to date.
Once a check is written, the payee must take it to a bank to cash or deposit it. Some payees do this right away, while others may take their checks to the bank in batches. After a check enters a bank, it must be cleared. This includes processing at the payee’s bank and sending the check to the drawee’s bank for payment. Electronic processing has greatly simplified this process, and if the payee and paying bank are at the same institution, a check can be cleared in a single day.
Even though a check is outstanding, the person who wrote the check may deem the funds unavailable even though they still show up in your account. This is done to prevent an overdraft, where money is withdrawn and an outstanding check is cashed at the same time, causing a bank account to go into a negative balance. Checks can be written on a transaction register with the amount deducted immediately to keep track of how much money needs to be present in an account.
Some banks will provide lists of uncashed checks, based on the number of checks that have cleared, on statements. People can compare the numbers of uncashed checks with their own records to determine the total number of outstanding checks. Institutions and businesses can contact people who have outstanding checks to confirm that they were received and that there are no issues. It may be necessary to void an outstanding check and write a new one if a check is lost, stolen or never received, for example.
To avoid confusion, an outstanding check is usually void after a set period of time. Checks may be printed to indicate that they are void within 90 days or six months, or a bank may have a policy of not honoring checks older than six months. People unfamiliar with bank policy may want to ask before attempting to cash or deposit an old outstanding check. It may be necessary to request that a new check be issued.
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