What is an outstanding check?
Quick answer
An outstanding check (outstanding cheque in British spelling) is a check you have written and recorded in your books that has not yet cleared your bank account. The books show the money as spent, but the bank still shows it as available until it clears. It is a timing difference, not a mistake.
Last updated
Take the free module →Module 7 of the free AI for Accounting & Bookkeeping Firms course, about 12 minutes. No account needed.
Updated · By Robert Breen
Why it matters for a small business
Outstanding checks are the most common reason a bank statement and the books disagree at month-end, and the easiest to mislabel. A bookkeeper who treats one as an error can end up recording the payment twice. One who ignores it without noting it may not notice when the check never clears, which can mean a lost check or a payee who never deposited it.
In a bank reconciliation, outstanding checks are listed as reconciling items. You subtract them from the bank balance to get the adjusted bank balance, and you carry them forward until the bank shows them. Old ones are worth a phone call.
Outstanding check vs other reconciling differences
| Difference | What it is | Needs an entry in the books? |
|---|---|---|
| Outstanding check | Written and booked, not yet cleared by the bank | No. It clears later. |
| Bank fee | Charged by the bank, not yet in the books | Yes |
| Missing deposit | On the bank statement, not booked | Yes |
| Duplicate entry | The same bill booked twice | Yes, remove or reverse one |
The rows are examples of the differences that show up in a typical month, not a complete list.
In a real lesson: Month-End Bank Reconciliation with ChatGPT: 20 Minutes, Not 3 Hours
In the Month-End Bank Reconciliation with ChatGPT lesson, Harbor Lane Studio is a made-up design studio closing September. Four differences explain a gap of $4,370.50. One is check 1027 to Corbin Tree & Lawn for $850.00, written on September 29 and not yet cleared.
ChatGPT labels it a timing difference. That tells you what to do: nothing in the books, because the check is already recorded. You carry it as a reconciling item, and it should clear in October. Only the other three differences need you to touch the accounting software.
Try this lesson free or read the step-by-step guide.
Common confusions
Outstanding check vs bounced check
An outstanding check has simply not been deposited or processed yet. A bounced check was refused for lack of funds and needs follow-up with the payer.
Outstanding check vs deposit in transit
A deposit in transit is money you recorded as received that has not reached the bank yet. It is the same timing idea on the other side of the reconciliation.
Tips
- List every outstanding check with its number, date and amount in the reconciliation file.
- Check last month's list first, so you can see which ones cleared.
- Follow up on any check that has been outstanding for a long time.
Related terms
More Business terms
Where you use it: free lessons
- Month-End Bank Reconciliation with ChatGPT: 20 Minutes, Not 3 Hours (ChatGPT, 12 min)
Frequently asked questions
- What does outstanding check mean?
- It means a check you wrote and recorded that the bank has not paid yet, so it is missing from the bank statement but already in your books.
- What are outstanding cheques?
- The same thing in British and Canadian spelling: cheques you have issued and recorded that the bank has not paid yet. They are handled the same way in a bank reconciliation.
- Do outstanding checks need a journal entry?
- No, because they are already recorded. You list them as reconciling items and carry them until they clear.
- How long can a check stay outstanding?
- Banks set their own rules for stale checks, often around six months, so check yours. Contact the payee about any old check.