In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies. The policy should more clearly outline what you are going to do if a recipient does not cash a check that you’ve issued. If your bookkeeper or accountant sees that you have a check that’s approaching expiration, you should be diligent in contacting the other business and encouraging them to cash the check. The length of time for the dormancy period can vary considerably from state to state. The Securities and Exchange Commission (SEC) says that the period is “often five years.” However, you should look at the escheatment laws for the state in which you’re conducting business.
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They should act within that time period – to deposit or cash the check. Make sure to review your bank statement to ensure no checks you’ve written go stale. If a check you wrote is approaching the six-month stale dated check definition mark but still hasn’t been cashed, you’ll be able to spot it so that you can get in touch with the recipient. Outstanding checks that remain so for a long period of time are known as stale checks.
Stale-dated checks: What to do with them?
- These issues can include fees, delays, or even legal trouble in some cases.
- A stale dated check is one that has not been cashed or deposited by the recipient within a certain period of time, usually six months.
- Banks don’t have to accept checks that are more than six months (180 days) old.
- Not only are electronic payments more convenient, they’re also more secure, reducing the risk of lost or stolen checks.
It may seem silly to urge a payee to cash a check, but it will save you administrative and accounting time and hassle down the road. To ensure you can implement this policy, require accounting to collect contact information — such as phone number, email address and physical address — before disbursing any checks. Even if both banks accept the old check, it could bounce later due to insufficient funds. If the check writer closes their account or doesn’t have enough money, you’ll be responsible for the check amount and possible fees. You must handle bill payments, clear debts, and ensure timely employee payment.
What if you find a stale check?
- Several things can happen when a bank account holder bounces a check.
- Bouncing an outstanding check can lead to financial consequences, such as fees imposed by the bank, damage to your credit rating, and potential legal actions from the payee.
- The article was reviewed, fact-checked and edited by our editorial staff prior to publication.
- At this point, the only way to process the payment is if the drawer — otherwise known as the check writer or issuer — changes the date on a replacement check or issues a new check.
- Of course, depending on the situation, purpose of payment, and circumstances surrounding not processing the check in a timely manner, this may be easier than in other instances.
But figuring out what to do if a check resurfaces may seem confusing, especially if they resurface months, or even years, later—perhaps well after their expiration date. Resourceful Finance Pro, part of the SuccessFuel Network, provides the latest Finance and employment law news for Finance professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day’s headlines, Resourceful Finance Pro delivers actionable insights, helping Finance execs understand what Finance trends mean to their business. Though you want to avoid letting a check go out of date, there are some important considerations for a check that has become outdated. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
But every now and then, you may need to write a check to a vendor or receive one as a form of payment. It is imperative for an issuer to provide payees with timely communication regarding the issuance of a check as well as any pertinent details as soon as possible. This makes it easier to set expectations and gives them the opportunity to plan properly. Be mindful of post office conditions and potential delays for seasonality, weather, or staffing issues.
What are the risks of cashing a stale-dated check?
However, it’s important to note that payees are not required to honor your request. Depending on your relationship with the payee, this may or may not be a viable option. The eRoutingNumber™ database Includes All ABA Routing Numbers in the United States, as well as the bank website in many cases. The eRoutingNumber™ database also contains the bank phone number and best number to call for check verification.
What types of checks can ‘go stale’?
- However, it is up to the bank to decide if it will process a stale check.
- However, if the tenant does not cash the check in a timely manner, the check can become stale dated.
- You’ll probably pay a penalty fee to your bank for writing a rubber check.
- Our writers and editors used an in-house natural language generation platform to assist with portions of this article, allowing them to focus on adding information that is uniquely helpful.
- Routing Number Results are Updated Daily from the eRoutingNumber™ Database.
- Dealing with checks the bank returns as “non-negotiable-stale dated” can present significant challenges, as well as unnecessary headaches for your A/P staff.
Write an Expiration Date on the Check
