USA How to handle old outstanding checks


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Recently started at a company that has some unreconciled Accounts Payable checks (outstanding checks...never cashed). The checks are from 2017/2018. I need to void them, but do I put in a credit memo to offset the invoice that will show payable? Obviously, they must have already been paid again or the vendor would have been in contact. If a credit memo - do I code it to other income?
 
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kirby

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AGH told you how to do this last year for credits. Same process for checks. You have to research why they are unpaid. The state will not accept "obviously" as valid support.
 
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AGH told you how to do this last year for credits. Same process for checks. You have to research why they are unpaid. The state will not accept "obviously" as valid support.
Two different scenerios which I why I posted it separate so others could learn along with me. I don't think I mentioned using the support of "obviously"
 
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If the scenarios is that the vendor has been paid, there should be another invoice matched that payment. This means same invoice has been put into the financial systems twice, therefore you will need to cancel one of them by creating a credit note using the same code used for that invoice. Hope this can help.
 
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Werner Reisacher

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Glad Kirby brings up the issue of companies' responsibility towards the State. We are dealing with the issue of "unclaimed property". I have seen it mainly in connection when incoming checks from customers cannot be matched with corresponding invoices. In order to be able to close out the daily batch of check entries into the receivable accounts, the accountants often "temporarily" credit such funds to a "pending checks" account for further investigation at a later date.
Show me an accounting department that is not struggling with unreconciled balances. But in this case, we are really dealing with a hot issue. The following URL describes this issue and the severe penalties that are involved. If a company is not able to identify the owner of such funds and does not submit them within a certain time to the State in which the company is doing business.
You may want to look up your State's "unclaimed property" website to find out, whether there is any money out there that belongs to you.

https://www.mossadams.com/articles/2016/august/reporting-steps-for-unclaimed-property
 

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