How to record post-dated cheques in accounts in the UAE: received and issued

A post-dated cheque cannot be presented until its date, and it may bounce when it is. Until then, the customer still owes you the money, and your receivable should stay open. Recording PDCs as bank receipts on the day you receive them overstates cash and understates receivables, sometimes by hundreds of thousands of dirhams.

Our view: PDCs belong in a register and, if you want them on the balance sheet, in a clearly labelled “PDCs on hand” account that is never added to cash when you assess liquidity.

Method one, register only: keep the invoice open in receivables, log each PDC in a register with cheque number, bank, date and amount, and record the receipt only when the cheque is deposited on its date. This is simple and keeps the ledger clean.

Method two, PDC account: on receipt of the cheques, debit “PDCs receivable” and credit accounts receivable; on the cheque date, debit bank and credit PDCs receivable. This shows the customer’s balance as settled by cheque while making clear the cash has not arrived. Either works if applied consistently. What does not work is debiting bank on the day you receive a cheque dated three months ahead.

A commercial landlord in Sharjah signs a one-year lease at AED 144,000 plus 5% VAT, AED 151,200 total, paid by twelve monthly cheques of AED 12,600. The landlord invoices according to the lease terms and records output VAT as each date of supply arises.

Under method two, on receiving the cheques the landlord debits PDCs receivable AED 151,200 and credits the tenant’s receivable as invoices are raised. Each month on the cheque date: debit bank AED 12,600, credit PDCs receivable AED 12,600. At any month-end, the PDC account shows exactly how much rent is still in the drawer, by tenant and by date.

• Register: cheque number, drawer, bank, date, amount, status
• Review the register weekly and deposit cheques on their date
• Mark cheques cleared only when the bank statement shows them
• Move bounced PDCs back to receivables the same day

When you give a supplier post-dated cheques, your liability to them is still there until the cheques clear. Many UAE businesses move the balance from accounts payable to a “PDCs issued” account so the supplier ledger shows the bills as covered, and then debit PDCs issued and credit bank on each cheque date.

The real risk is cash. Every PDC you issue is a fixed future outflow you cannot easily stop. Build them into the cash flow forecast by date, and never issue one without checking the forecast balance for that week.

HelloBooks has no dedicated PDC module, so the register runs on general features: a PDC receivable account and a PDC issued account, with the cheque number, bank and date in each line’s reference and memo, and the scanned cheque copies attached. Recurring entries can schedule each month’s clearing journal.

The AI agent reads cheque copies you photograph, proposes the PDC entries, and when you upload the bank statement it matches the deposited cheques by number and amount and drafts the clearing entries. Ask “which PDCs are due to be deposited next week?” or “how much do we owe in PDCs issued this month?” and it answers from the ledger. Firms that want a dedicated PDC report layout can ask the team for a customised report.