I have a cheque that hasn't been cashed for a year and looks certain to not be cashed. I've gathered that 6 months in general for banks and 6 years by law are cashing periods. But how do I deal with the uncashed cheque for bookkeeping and returns purposes?
It's in the books now, but you can't claim an amount as an expense if it hasn't been expended no?!
It was a one off purchase, so my client doesn't get statements from this company, and they are unlikely to realise the mistake now.
I have had someone chase after 2 years, so you never know. I don't believe its law about 6 years, I don't think there is a date that a cheque becomes null and void.
You could write off the amount, depending on how much it is for, if you are confident that thye will not chase for it.
I would leave the original entry as it is. If you are sure it is unlikely to clear the bank then just write out the cheque again (in the current month) in you cash book, but in red and with brackets or a little - sign. That in effect in my opinion should contra/cancel the original entry when you do your bank reconciliation.
no legal limits of cheques, however a bank could refuse to accept it! There has also been mention of the 6 year limit but I am unsure of the legality of this.
