This guide explains how to manage post-dated checks (PDCs) using the specific G/L accounts Post Dated Checks (for buyers) and Undeposited Funds (for sellers) in AccountingSuite.
For the BUYER (Issuing a Post-Dated Check) #
When you issue a PDC, you are creating a liability that is not yet due. Use the “Post Dated Checks” G/L account to track this.
Process:
- Create a Bill: Record the vendor invoice as you normally would.
- Pay the Bill with a PDC:
- Go to Bill Payment document.
- Select the bill to pay.
- As the payment account, choose “Post Dated Checks” instead of your regular Bank account.
- Enter the PDC details (check number, future date) in the Memo field.
Accounting Effect (G/L Impact):
- Debit: Accounts Payable (clears the debt to the vendor)
- Credit: Post Dated Checks (records the new liability for the outstanding check)
When the Check Date Arrives & It Clears:
- The funds move from the “Post Dated Checks” account to your bank. This is done via a Bank Transfer document.
- Bank Transfer:
- From Account: Your Bank Account
- To Account: Post Dated Checks
- This transaction closes the PDC liability and reduces your cash.
For the SELLER (Receiving a Post-Dated Check) #
When you receive a PDC, you have an asset that you cannot deposit immediately. Hold it in the “Undeposited Funds” G/L account.
Process:
- Create a Sales Invoice: Record the sale as you normally would.
- Receive Payment with a PDC:
- Go to Cash Receipt document.
- Select the customer and invoice.
- As the G/L account, choose “Undeposited Funds” instead of your regular Bank account.
- Enter the PDC details (check number, future date) in the Memo field.
Accounting Effect (G/L Impact):
- Debit: Undeposited Funds (records the asset of the held check)
- Credit: Accounts Receivable (clears the customer’s debt)
On the Check’s Date When You Deposit It:
- Move the funds from “Undeposited Funds” to your bank account using the Deposit document.
- Create a Deposit:
- Select the Cash Receipt or Cash Sale documents in a lines from “Undeposited Funds” that you are now depositing (the PDC that has matured).
- Deposit them into your actual Bank Account.
Accounting Effect (G/L Impact):
- Debit: Bank Account (increases your cash)
- Credit: Undeposited Funds (decreases the held funds asset)
Summary Workflow #
| Role | Action | Document in AccountingSuite | G/L Account Used |
|---|---|---|---|
| Buyer (Issuer) | Issue a PDC to a Vendor | Bill Payment | Post Dated Checks (as the payment account) |
| Buyer (Issuer) | Clear the PDC on its date | Bank Transfer | From: Bank Account To: Post Dated Checks |
| Seller (Receiver) | Receive a PDC from a Customer | Cash Receipt | Undeposited Funds (as the deposit account) |
| Seller (Receiver) | Deposit the matured PDC | Deposit | From: Undeposited Funds To: Bank Account |
By following this process, you ensure that post-dated checks are properly tracked in your accounting records without distorting your actual bank balance until the payment is legally due. To control information about Checks (check number, future date, others) use the Memo field in the payment documents.