Bank Reconciliation Outstanding Checks: How to Record and Resolve Them

Updated: August 2026

Bank reconciliation outstanding checks are checks your business has already recorded in its books but that haven't yet cleared the bank, and they're normally subtracted from the bank-statement balance to arrive at the true adjusted balance. No additional journal entry is usually required simply because a check remains outstanding, since the original entry already reduced your cash balance when the check was issued. Old or questionable checks need investigation before you void, reverse, reissue, stop, or treat them as unclaimed property, consistent with AccountingCoach's current bank-reconciliation guidance.

What Is an Outstanding Check in Bank Reconciliation?

An outstanding check is one your business has recorded and issued but the bank hasn't yet paid. This is different from an unrecorded check, which never made it into your books at all, and different from a bank error, which is a mistake on the bank's side rather than a normal timing difference.

Where Outstanding Checks Go on the Reconciliation

Outstanding checks reduce the balance per bank when you're reconciling toward the balance per books. The formula below shows how the pieces fit together, and it's worth keeping this structure in mind before working through any specific example:

Do Outstanding Checks Require a Journal Entry?

Generally no, because the check was already recorded as a reduction to cash when it was issued; the reconciliation adjustment is a bank-side timing item, not a book-side correction. A journal entry becomes necessary in specific exception cases instead, summarized here before you assume none is needed:

How to Identify Outstanding Checks

Compare your check register, general ledger, current bank statement, and prior month's reconciliation, matching each check by number, date, payee, and amount. A check appearing in your records but not on the statement, and not already listed as outstanding last month, is a candidate to add to this month's list.

What Happens to Prior-Month Outstanding Checks?

Checks still uncleared carry forward onto this month's reconciliation. Once a check clears, remove it from the outstanding list. If a previously listed check disappears from your records without clearing, or appears to have been entered twice, investigate before assuming it simply resolved itself.

How to Handle Old or Stale-Dated Checks

Contact the payee to confirm whether they still intend to cash it, verify the underlying obligation is still valid, and consider a stop payment and reissue if appropriate. Under UCC 4-404, a bank isn't obligated to pay an ordinary check presented more than six months after its date, but it may still choose to pay it in good faith, so an old check isn't automatically void. In Minnesota, uncashed or returned checks may become reportable unclaimed property under state rules, so review the current Minnesota Office of the State Auditor guidance on uncashed checks before writing anything off.

Outstanding Check Errors to Watch For

Watch for a check recorded at the wrong amount or posted to the wrong account, a check voided in the bank's system but not in your books, a duplicate payment, an unauthorized check, a missing check number in your sequence, or a posting-date error that puts a check in the wrong period.

Internal Controls for Outstanding Checks

A monthly aging report for outstanding checks, independent review separate from whoever issues checks, documented payee outreach on old items, segregation of duties between check preparation and reconciliation, and a formal sign-off on the completed reconciliation all help catch problems before they compound, consistent with Minnesota's uncashed-check guidance for businesses.

Worked Example

As a purely hypothetical illustration: a bank statement balance of $24,500 includes three outstanding checks of $1,200, $340, and $75, plus one deposit in transit of $2,000. The adjusted bank balance works out to $24,500 minus $1,615 in outstanding checks, plus $2,000 in the deposit in transit, equaling $24,885, which should then match the adjusted book balance once any deposits recorded but not yet shown on the bank statement are also accounted for.

FAQ

Do outstanding checks reduce the bank or book balance?

They reduce the balance per bank during reconciliation, not the balance per books, since the books already reflect the check as a reduction to cash when it was issued.

Is a journal entry needed for an outstanding check?

Generally no for an ordinary outstanding check. A journal entry is needed for exceptions like a wrong amount, a duplicate entry, a void or reversal, or a reissue.

How long can a check remain outstanding?

There's no fixed universal answer; it depends on when the payee deposits it, your bank's policies, and applicable state unclaimed-property rules, so treat each old item individually rather than assuming a fixed cutoff.

What happens when it clears next month?

It clears the bank and drops off your outstanding-check list on the following reconciliation; no new book entry is needed since the original entry already recorded it.

Can an old check be written off?

Only after investigation confirms it's appropriate, following your bank's stop-payment process and applicable state unclaimed-property rules; don't remove an old check from your books solely because time has passed.

Next Step

For a practical reconciliation worksheet, use Horizon Bank's Bank Statement Balancing Form, which provides separate fields for deposits not shown on the statement and checks still outstanding.