Cheque & note tracking: is the cash really yours?
You hold a 100K customer cheque. Is that money in your cash? The answer is no — not yet. And failing to make this distinction pushes many businesses into wrong decisions.
Cheques and notes are deferred payment instruments: they reach your hand today but the money is collected only at maturity. So cheque-note tracking is a critical part of seeing your true cash position. The basic rule: a cheque in your portfolio is not part of your cash-bank balance until it is collected.
Why keep them separate?
Say you have 100K cash and a 100K customer cheque. If you add them and say “I have 200K,” you act as if you’ve already got money you don’t hold yet. If the cheque bounces or its maturity is far off, you find yourself in a cash crunch. Correct pre-accounting logic tracks cheques separately and adds them to the balance only when collected.
Two-way tracking
- Cheques receivable: cheques taken from customers, turning into cash at maturity.
- Cheques payable: cheques given to suppliers, leaving cash at maturity.
Both groups are excluded from the balance but must appear in your cash-flow forecast: which cheque enters when, which leaves when. This lets you build your forward cash position correctly.
In short, the cash you see on screen should be the cash you actually hold. Tracking cheques separately protects you from the trap of spending money you don’t have.
See your true cash position
Cheques separate, cash-bank clear. Try the pre-accounting module with your own data in a demo.
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