Key takeaways
What this article covers, in order:
- Quick refresher: what's an unpresented cheque?
- When does a cheque go stale in Australia?
- Step 1: Pull out your old outstanding items
- Step 2: Contact each payee
- Step 3: Decide what happens to each cheque
- Step 4: See what it does to the reconciliation
Every month the same cheque turns up on your reconciliation's list of unpresented cheques. $415.00, written in early 2025, never banked. An unpresented cheque that old needs a decision: contact the payee, cancel and reissue if they're still owed, or write it back in your books if they're not. Leaving it there forever just makes your bank balance look smaller than it really is.
Quick refresher: what's an unpresented cheque?
It's a cheque you've written and recorded in your books, but the payee hasn't banked yet. Your books treat the money as gone. The bank still has it in your account. On a bank reconciliation, it sits on the bank side as a deduction until it clears.
A cheque that clears within a week or two is completely normal. One that's still outstanding after several months isn't.
When does a cheque go stale in Australia?
In Australia, a cheque is generally treated as stale once it's more than 15 months old. After that, a bank can refuse to pay it. Your bank's own terms are what count, so check with them if you're relying on a specific date.
Two practical points:
- Stale doesn't mean the debt is gone. If you owed the payee money, you probably still do. The cheque just isn't a valid way to pay them anymore.
- Don't wait 15 months to act. If a cheque hasn't cleared after two or three months, that's the time to find out why.
Cheques are also being phased out in Australia over the next few years, so this is a good moment to move the last cheque-preferring suppliers to EFT.
Step 1: Pull out your old outstanding items
Start with a list. Here's an illustrative example. Graham runs a small engineering workshop in Launceston and still writes the odd cheque. His bank reconciliation at 30 Sep 2026 carries four unpresented cheques:
| Cheque | Date written | Payee | Amount | Age at 30 Sep 2026 |
|---|---|---|---|---|
| 1022 | 14 Mar 2025 | Former subcontractor | $415.00 | Over 18 months, stale |
| 1037 | 2 Jun 2025 | Steel supplier | $1,180.00 | Just over 15 months, stale |
| 1051 | 19 Nov 2025 | Local sports club sponsorship | $96.50 | About 10 months |
| 1058 | 8 Aug 2026 | Equipment hire company | $2,300.00 | Under 2 months |
| Total | $3,991.50 |
Check: $415.00 + $1,180.00 + $96.50 + $2,300.00 = $3,991.50.
Cheque 1058 is recent and fine. The other three need a look.
Step 2: Contact each payee
A short email or call sorts most of these out. You're asking one thing: do they still have the cheque, and are they still owed the money?
For Graham:
- Cheque 1037, steel supplier. They check their records and confirm they never received it. Probably lost in the post in mid 2025. The invoice is still showing as unpaid on their side.
- Cheque 1022, former subcontractor. The phone number is disconnected and emails bounce. Graham can't reach them.
- Cheque 1051, sports club. The treasurer finds it in a drawer, apologises, and says they'll bank it this week.
Step 3: Decide what happens to each cheque
There are really only three outcomes.
| Situation | What to do | Bookkeeping |
|---|---|---|
| Payee still owed, cheque lost or stale | Stop the cheque with your bank, pay again by EFT | Reverse the cheque, record the new payment |
| Payee says nothing is owed | Stop the cheque if needed | Reverse the cheque to the original expense or account |
| Payee can't be found | Keep trying, and ask your accountant | Reverse the cheque to a liability account, not to income |
Payee still owed: reverse and repay
For cheque 1037, Graham asks his bank to stop the cheque (there may be a fee). Then he makes two entries:
| Entry | Debit | Credit | Amount |
|---|---|---|---|
| Cancel cheque 1037 | Cash at bank | Accounts payable (steel supplier) | $1,180.00 |
| Pay by EFT, Oct 2026 | Accounts payable (steel supplier) | Cash at bank | $1,180.00 |
The first entry puts the money back in his bank account in the books and reinstates what he owes. The second records the new payment. His expense for the steel was already recorded when the bill was entered, so it doesn't change.
Payee can't be found: write back to a liability
For cheque 1022, Graham still owes the money. He just can't find the person. So he reverses the cheque, but into a liability account, not into income:
| Entry | Debit | Credit | Amount |
|---|---|---|---|
| Write back cheque 1022 | Cash at bank | Unclaimed payments (liability) | $415.00 |
Writing it to income would be tempting, but it's not his money to keep. Depending on the circumstances, unclaimed money rules may also apply to amounts you can't pay out. That's one to raise with your accountant, along with how long to keep trying.
Payee says it's coming: leave it
Cheque 1051 stays on the list. Graham makes a note to check it's cleared on his October 2026 statement.
Step 4: See what it does to the reconciliation
Here's Graham's reconciliation before and after. His statement closing balance at 30 Sep 2026 is $12,604.20.
Before the clean-up
- Statement balance $12,604.20, less unpresented cheques $3,991.50 = adjusted bank balance $8,612.70
- Book balance: $8,612.70
After writing back cheques 1022 and 1037
- Unpresented cheques now $96.50 + $2,300.00 = $2,396.50
- Statement balance $12,604.20, less $2,396.50 = adjusted bank balance $10,207.70
- Book balance $8,612.70, plus $1,180.00, plus $415.00 = $10,207.70
Still balanced. And his books now show $1,595.00 more cash at bank, which is accurate: that money never actually left his account. The $1,180.00 goes out again by EFT in Oct 2026, and the $415.00 sits as a liability until it's resolved.
Preventing the problem next time
A few habits keep this list short:
- Review outstanding cheques every month, not just the total. Anything over 60 days gets a follow-up.
- Ask suppliers to accept EFT. Most do. Cheques bring postage delays, lost mail and this exact clean-up job.
- Record the payee's contact details with the bill, so you can reach them later.
- Don't delete old cheques from your books to tidy the reconciliation. Reverse them properly with a dated entry so there's a trail.
How HelloBooks helps
HelloBooks' reconciliation report lists outstanding items alongside the opening balance, cleared items and closing balance, so old cheques are easy to spot month after month. The report exports as PDF or CSV for your files or your accountant. When a reconciled period is signed off it can be locked, and any reopening is logged, which stops a well-meaning tidy-up from quietly changing last year's figures.
Supplier bills and their payments live in the same books, and the AP ageing report shows what's still owed. If you want help working out the right treatment for an unclaimed amount, your bookkeeper or accountant can be invited into the same books. Read about reconciliation in HelloBooks or the full feature list.
FAQs
How long is a cheque valid in Australia?
A cheque is generally considered stale after 15 months, and a bank may refuse to pay it after that. Check your own bank's terms.
Can I just delete an old cheque from my books?
No. Reverse it with a dated entry so there's a record of what happened and why. Deleting it changes past periods and breaks earlier reconciliations.
Should I write an old cheque back to income?
Usually not. If you still owe the payee, the amount belongs in a liability account until it's paid or resolved. Ask your accountant before treating any of it as income.
Do I need to stop a cheque before reissuing payment?
It's wise. Otherwise the payee could bank the old cheque and get paid twice. Your bank can stop it, sometimes for a fee.
What about cheques I've received but haven't banked?
Bank them promptly. If one is close to 15 months old, talk to the payer about a replacement or an EFT.
Clear the old ones once, set a 60-day follow-up rule, and that outstanding list will stay short.
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