Outstanding and stale checks: how to handle them in your rental books

Outstanding checks at month end

You wrote a $300 check to a plumber on the 29th. Your books show the cash gone. The bank does not, because the plumber has not deposited it. That $300 is an outstanding check. On the bank reconciliation, subtract it from the bank balance to reach your book balance.

Example a made-up bank statement balance is $8,450. Two checks are outstanding, $300 and $125. The adjusted balance is $8,025 ($8,450 less $300 less $125), and the book balance should also be $8,025.

Nothing is wrong. List them, and next month confirm each one cleared. The full routine is in bank reconciliation for rental property.

When a check becomes stale

There is no single date. Many banks treat a check as stale after 6 months, and the Uniform Commercial Code says a bank is under no obligation to pay a check, other than a certified check, presented more than six months after its date. See UCC section 4-404. A bank may still choose to pay it. State law and your bank's agreement decide the rest, so ask the bank.

A check that is 60 to 90 days old and still outstanding should already be on your follow-up list. Do not wait six months.

What to do with a check that never cleared

1. Contact the payee. They may have lost it, never received it, or not deposited it.
2. If it is lost, ask your bank for a stop payment so the old check cannot be cashed by someone else. Banks charge a fee for this; book the fee as a bank charge.
3. Void the original on the books, with the date you voided it. The entry reverses the first one: debit Checking, credit the expense or the payable you paid.
4. Issue a new payment if the bill is still owed, and record it as a new entry with a new date.
5. Keep a note on both entries so a later reader sees the link.

Example a $300 check from March is still outstanding in September. You void it by debiting Checking $300 and crediting Repairs $300 (or Accounts payable if it was a bill), then pay a new $300 by bank transfer. The balance now includes the cash again until the new payment leaves. The expense is still counted once.

Be careful with the tax year. A check you voided in a later year changes the year of the deduction, under the cash method, to the year of the replacement. Tell your preparer if a voided check crosses December 31.

If you cannot find the payee

If a tenant refund check goes uncashed because they moved without telling you, you may owe the money to the state as unclaimed property after a dormancy period. The period and the process differ by state, so look up your state treasurer or comptroller's unclaimed property rules. Do not move the money into your income. Keep the liability on the books, record your attempts to reach the person, and follow the state rule.

For deposit refunds, the state's deposit law may also say what happens to money you cannot deliver. See track security deposits by property.

How to have fewer of them

• Pay by bank transfer where the payee allows it. It clears in a day or two and leaves nothing outstanding.
• Review outstanding items weekly, and follow up on any older than 30 days.
• Never write a check you cannot cover, and never leave the payee line blank.
• Keep the IRS recordkeeping basics: the check number, date, payee and what it paid for.

How DoorKeeping handles it

DoorKeeping imports your bank feed and matches each line to a ledger entry, so a check you recorded shows as outstanding until its bank line arrives, and the month-end close lists anything still unmatched. You approve a void or a reissue before it is recorded. Each property keeps its own books and bank account. Stop payments and unclaimed property are handled with your bank and your state.

Sources

1. Cornell Law School, Uniform Commercial Code 4-404, Bank not obliged to pay check more than six months old, read Oct 30, 2026
2. IRS, Recordkeeping, read Oct 30, 2026

Questions

What is an outstanding check?

A check you wrote and recorded that has not yet cleared the bank. It is subtracted from the bank balance on your reconciliation.

How long is a check good for?

Under the Uniform Commercial Code a bank does not have to pay a check presented more than six months after its date, but it may. Check your bank's rules.

Can I just delete an old uncashed check?

No. Void it with a dated entry that reverses the original, then reissue if the bill is still owed. Deleting it hides the history and breaks the reconciliation.