Invoice payment with post dated checks

[Arishy]

Can you please guide me on the mechanics of recording a post dated
check for an existing invoice. What account should I use to offset the
reduction on Accounts Recievables.

Also, for the owner of the business how do I instruct him to consider (
look at) when he/she looks at customer payements/account
recievables/cash in banks.

 

[S.M.Serba]

Can you please guide me on the mechanics of recording a post dated
check for an existing invoice. What account should I use to offset the
reduction on Accounts Recievables.

Also, for the owner of the business how do I instruct him to consider (
look at) when he/she looks at customer payements/account
recievables/cash in banks.

Why would you simply not receive it normally, but use the date of the
cheque? EG. receive it in your system today, but date the receipt for the
date of the cheque?

 

[Z Man]

Can you please guide me on the mechanics of recording a post dated
check for an existing invoice. What account should I use to offset the
reduction on Accounts Recievables.

Also, for the owner of the business how do I instruct him to consider (
look at) when he/she looks at customer payements/account
recievables/cash in banks.

This is really more of an accounting question than a QB question, so I'll
take a stab at it. I see three options:

(1) record it in the customary manner, same as if the check was not post
dated.

(2) don't record it at all, until the date of the check arrives and it is no
longer post dated. The theory here is that your customer has really not paid
you anything, you have merely received a promise of payment. You would not
'record' a promise until the actual payment arrived.

(3) Record it as if you have received a promissory note in payment. In such
a case, you would record the debit to Notes Receivable instead of cash, and
when you receive the cash (or in this case, when you deposit the check) you
would credit Notes Receivable

Of the three possibilities, I would be inclined to use #2. The most
realistic analysis is that your customer has paid you nothing until the post
dated period ends.

 

[Arishy]

Thank you for your response(s).
My apology for asking an "accounting" question and not QB question.
Well, I am using QB2004 Premier and I am trying to create accounts in
QB to "take care" of this post dated checks which I recieve a lot and
has to be recorded somewhere and use QB to follow on it up. For example
I go to my "post dated checks" and see if any is due then deliver these
checks to the bank for collection.

As for the practice of paying by post dated checks. The acceptable
proceedure is "<<Record it as if you have received a promissory note in
payment>>"
So, for keeping a record of these checks ( Inside QB ) I will opt for
this one (Option #3).

Having established that "accounting" solution...I still need your help
in the mechanics.... Bare with me..Please
I will create an account called Promissory Notes. When I record the
check as payement WITH POST DATED date, it must offset Account
Recievables. So, when I print customer Statement it must show as
payement. The check must also be posted to Promisory Notes.!!!!! Then
when payement actually arrives . The PNote account will be offset by
bank deposit. Is that OK?

I do apprecaite this "hand holding" question but as you must know by
now, I am not an accountant..

 

[Allan Martin]

Thank you for your response(s).
My apology for asking an "accounting" question and not QB question.
Well, I am using QB2004 Premier and I am trying to create accounts in
QB to "take care" of this post dated checks which I recieve a lot and
has to be recorded somewhere and use QB to follow on it up. For example
I go to my "post dated checks" and see if any is due then deliver these
checks to the bank for collection.

As for the practice of paying by post dated checks. The acceptable
proceedure is "<<Record it as if you have received a promissory note in
payment>>"
So, for keeping a record of these checks ( Inside QB ) I will opt for
this one (Option #3).

Having established that "accounting" solution...I still need your help
in the mechanics.... Bare with me..Please
I will create an account called Promissory Notes. When I record the
check as payement WITH POST DATED date, it must offset Account
Recievables. So, when I print customer Statement it must show as
payement. The check must also be posted to Promisory Notes.!!!!! Then
when payement actually arrives . The PNote account will be offset by
bank deposit. Is that OK?

I do apprecaite this "hand holding" question but as you must know by
now, I am not an accountant..

Before I would do anything, I would probably consult with my accountant or
attorney and determine what the status of a post dated check is in my state.
Many state laws consider post dated checks of the same status as nornal
checks.

I personaly would record the payment with a receipt date of the date I had
physical possession of the check and post it
the same as all my other checks to undeposited funds. I would however create
a new payment type called "Post Dated Checks" and flag each of these checks
with this type when I record the receipt.

I would respect my customers' wishes and not cash the check until the date
on the check.

I would not create a mish mosh of my books by setting up bogus Promisory
Note accounts.

 

[Arishy]

Dear Allan,

Thank you for pursuing this matter ...
<<create a new payment type called "Post Dated Checks">>
is a perfect solution, As for the misnomer (pnote); of course you were
right; I should never use an account for the wrong purpose.
My Concern is the owner interpretation of his customer payments
situation. You see, if I include this "delayed payment" in the un
deposted funds I need to clarify to him that part of the funds will not
be available as others. So, How about creating two sub accounts under
the main account Un deposited funds, one says Un deposited Funds and
the other says Delayed un deposited funds. So the boss will be able to
judge payment situation in a better light.
Will QB handle this unorthodox solution?

 

[Allan Martin]

Dear Allan,

Thank you for pursuing this matter ...
<<create a new payment type called "Post Dated Checks">>
is a perfect solution, As for the misnomer (pnote); of course you were
right; I should never use an account for the wrong purpose.
My Concern is the owner interpretation of his customer payments
situation. You see, if I include this "delayed payment" in the un
deposted funds I need to clarify to him that part of the funds will not
be available as others.

When you open up the make deposits window, checks maked "Posted Dated" will
clearly be in view for him to see.
So, How about creating two sub accounts under

the main account Un deposited funds, one says Un deposited Funds and
the other says Delayed un deposited funds. So the boss will be able to
judge payment situation in a better light.
Will QB handle this unorthodox solution?

I do not recommend this approch. It gets very messy and difficult to work
with. Try it out in one of the sample companys to see for yourself.

If need be enter the list of post dated checks in a to do list.

 

[Chariss Lou Saluper]

Hi? Can i ask what should i do if i have a Post Dated Cheques that is not due and i open a new company in QB ??