Entering Uncleared / Unpresented Checks When First Setting Up Kashoo

Last Updated: Jan 08, 2015 08:12PM PST

Learn how to deal with uncleared checks (unpresented cheques for you Brits) when:

  1. You are first setting up Kashoo AND

  2. You had previously used a different accounting system

We all know that checks don’t get cashed right away. Usually this is a great thing, since money stays in your bank account longer. However, when it comes to accounting, uncleared checks present a bit of a problem.

What’s the problem you ask?

Well, checks that have not cleared (i.e. have not been cashed), cause the balance of your accounting system records to be different from your real bank account balance.

For example, let’s say a $500 check is written to AdWorks Advertising on December 20th, 2012. This check would be entered into your accounting software on that date and deduct $500 from your accounting system’s bank account balance. But in reality, your bank account still has that 500 in there, since the check has not been cashed yet. So there’s a $500 difference between your real bank account and your bank account records in your accounting system. Usually this is no problem, it is just a reconciling item. When the check is cashed, this reconciling item disappears.

However, if you are moving from one accounting system to another, this discrepancy is a problem. This is because when you move to Kashoo, the only information you initially bring over from your previous accounting system would be your accounts and their balances (i.e your trial balance). A trial balance does not contain details of individual transactions that took place in your previous accounting system, it’s simply a summary of all your account balances. That trial balance won’t show that there was a deduction for $500 for a check that has not been cashed included in the balance.

To make your accounts in Kashoo reflect your real bank account balance, follow these 2 steps:

Step 1

Add the uncashed check amount back to the bank balance. This will cause your records in Kashoo to match those in your bank.

Click on Transfers in the left side navigation menu

Enter the following:

  • Amount: $500
  • Withdraw From: Uncleared Checks
    • You’ll need to create an "Uncleared Checks" account by clicking on Add Account.

    • And then add this information:
      • Name: Uncleared Checks
      • Description: Uncashed checks from the previous accounting system
      • Type: Cash
      • Click on Add

  • Deposit Into: Bank Account
  • Date: December 31, 2012 (Note: In this example this date is the same date as the trial balance / opening balance date)
  • Memo: Adding uncashed check back to bank balance

Step 2

When the check clears your real bank account January 20th, 2013), enter a transaction to take money out of your bank account balance in Kashoo:

Click on Transfers in the left hand side navigation menu and enter the following information:

  • Amount: $500
  • Withdraw From: Bank Account
  • Deposit Into: Uncleared Checks
  • Date: January 20, 2013
  • Memo: Uncashed check from previous accounting system has been cashed

Notes

When you go to reconcile your bank account, the transaction from Step 1 needs to be manually cleared (since this transaction didn’t really occur in your real bank account).

  • If you imported your bank transactions into Kashoo (whether via automatic bank feed or upload), look for the transfer from step 1 in the Entered Transactions section. Once you find the transfer, click on the check box next to the sentence "No match found. Select to copy this transaction to the Bank Statement."

  • If you did not import your bank transactions into Kashoo, simply find the transfer from step 1 and check it off.

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