Its a very Big issue for me to handle post dated cheques in manager.
in United Arab Emirates
most of the clients are paying post dated cheque.
Please tell me how i can enter post dated.
I shared my knowledge with AI, which helped me write extensively. I believe it is worth it because our responses are not meant only for the original poster, but also to serve as a reference like scriptures for future users. Therefore, I ask for forgiveness for the lengthy explanation.
Because a post-dated cheque cannot be treated as cash until it matures, it should be tracked administratively outside the accounting ledger. One effective approach is to maintain a simple spreadsheet using Excel or Google Sheets. The register should record the key details of each cheque, such as the cheque number, customer, amount, cheque date, cashable status, and deposited status. The cashable/depositable status can be automated using a simple formula that compares the cheque date to the current date. In Excel or Google Sheets, the formula =IF(TODAY()>=D2,“Cashable”,“Pending”) automatically updates each day, showing “Pending” if the cheque is not yet due and “Cashable” once the cheque has matured. For additional clarity, the formula can be adjusted to display “Due Today” when the cheque date coincides with the current date using =IF(TODAY()<D2,“Pending”,IF(TODAY()=D2,“Due Today”,“Cashable”)). Conditional formatting further enhances visibility, allowing users to highlight cashable cheques in green, pending cheques in red, and cheques due today in yellow. A separate column for deposit status can be maintained to track which cheques have been successfully deposited, providing a clear audit trail and helping with reconciliation. Visiting this spreadsheet first thing every day ensures that business owners and staff know which cheques are ready for deposit, supporting proactive cash flow management.
It is important to emphasize that a post-dated cheque cannot reduce a receivable until it is actually deposited. The cheque itself does not create a new economic resource; the underlying economic resource already exists as a receivable generated by the original sale or service transaction (Issued Invoice). Attempting to record the PDC as an asset or to reduce the receivable prematurely would misstate the company’s financial position. A PDC is merely a document representing the form of payment for an existing receivable. It does not give the holder additional rights beyond those already held through the receivable, and it fails to meet the definition of cash or a cash equivalent under IFRS. Recording both a trade receivable and a “PDC on hand” as separate assets would effectively double-count the same future cash, which is inconsistent with accounting principles worldwide and would likely be flagged during an audit.
The correct accounting treatment is straightforward. When the sale occurs, the receivable is recorded in the accounting system as usual, debiting Trade Receivable and crediting Revenue. The PDC is tracked administratively, outside the ledger, until it matures. On the date the cheque is deposited and cleared by the bank, the receivable is reduced, and cash is recognized in the ledger by debiting Bank and crediting Trade Receivable. Only at this point does the cheque have economic substance as cash, and the receivable is considered settled.
By maintaining a dedicated PDC register and automating the cashable/maturity/depositable status with formulas and conditional formatting, businesses can efficiently monitor post-dated cheques, ensure they are deposited on the correct dates, and maintain compliance with accounting requirements. This approach also supports cash flow planning and reports, minimizes the risk of prematurely recognizing cash or assets, and provides a clear audit trail for all post-dated cheques in the business.
@lubos Creating a custom field for Maturity/Action Date column would be very useful. The user could enter a maturity date, and the system would display the status as follows: red if the date has not yet arrived, yellow on the day of maturity, and green for the days after. I will create a separate topic for this idea shortly.
In this scenario, the user can simply enter the cheque with a zero amount and use the custom fields to capture additional information, such as the actual amount and the readiness date. The entry can then be updated later to reflect the transaction accurately.
@masubhnai just sharing my practice, may it helps you out.
Step -01 Open Account
Step-02 New Custom Field
Step-03 Receiving PDC
Step-04 Practice on the Chq Date
When Depositing the cheque on date just edit the Account select the concern bank
and select the date.
In some jurisdictions, post-dated cheques are treated just like an ordinary cheque - ie the date on the cheque is ignored and the cheque can be presented to your bank for encashment whenever you want
Also, the customer can always cancel the cheque before you encash it, so it really has no value - it’s only worth as much as a promise to pay
@Syed_Salman_Ali Thanks for your help but i have alot of cheques and i have to set reminder for maturity date.
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In UAE approx all software has option of pdc cheque. they have special section for pdc cheques.
Which the invoice already has made. An invoice is even above a promise, it actually a legal claim against the buyer.
A cheque, on the other hand, is merely an instruction to a bank to transfer funds. It is an arrangement strictly between the account holder and the bank, not between the buyer and the supplier.
The true commercial obligation exists between the buyer and the supplier, and that obligation is established by the invoice, not the cheque. A cheque only becomes relevant once the bank actually executes the instruction and clears the funds.
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