[GNC] Outstanding Check Problem

[Stephen M. Butler]

On 10/3/19 10:29 AM, Matthew Lybanon wrote:
> This is more of an accounting question than a GnuCash question; what I would like to know is how to handle this within GnuCash. I’m sure that this situation isn’t unique, and there is probably a standard way of handling it in accounting.
>
> I am maintaining the checkbook for a club account. Several months ago I wrote a check to a member. He deposited the check, and the institution where he deposited  the check collected the money. But because of some mistake within the banking system (not my mistake, not his mistake), the money came from somewhere other than the account from which the check was issued–the one I am using GnuCash to keep records for. (If it was charged to another account at the issuing bank, the account holder hasn’t noticed the discrepancy.)
>
> That means that my records differ from the bank’s records by the amount of the check; everything else has cleared. Unless by some miracle the banking system straightens this out, my records will differ from the bank’s records forever. Is there a clean way to handle this, other than simply deleting that check from my (GnuCash) records and pretending it never existed?

My accountant wife (not a cpa -- no legal or professional accounting
advice offered) said she would contact the issuing bank to see how long
they would accept a correction on this particular check should the
banking system figure out the mistake.  She would still hold the
outstanding check open for up to a year.

I think you have a moral obligation to get advice from your bank.  They
are the ones who would have to accept/reject the check after 6 months or
so.  Perhaps the bank for your member could trace from whence they
obtained the funds.  Now, if the banks are not interested in resolving
this ...

If after a year you still don't have closure, then you should enter a
transaction reversing the check.  Keep both the original check and the
reversal in your records with notes that it never cleared the bank but
the recipient did receive payment and therefore does not get a
replacement check.

--Steve

-- 
Stephen M Butler, PMP, PSM
Stephen.M.Butler51 at gmail.com
kg7je at arrl.net
253-350-0166
-------------------------------------------
GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8