In many small businesses cheques are kept in a drawer, a bag, or a photo on a phone. While there are only a few, you remember them all. When there are dozens of received and issued cheques with different due dates, one forgotten due date means a bounced cheque or cash you weren't expecting to be short of.
A cheque is a future cash event
A received cheque means "money arrives on date X" and an issued one means "money leaves on date Y". So a cheque ledger is really your cash-flow forecast. That is why it should be kept apart from invoices and payments, yet linked to them.
Record these six things for every cheque
- Received or issued. The direction of the money.
- The counterparty. The customer or supplier it belongs to.
- Amount and currency.
- Cheque number and bank. For follow-up and if something goes wrong.
- Due date. The most important field; you must be able to sort and be reminded by it.
- Status. Pending, cashed, bounced or unpaid.
Look at next week's due dates every week
A simple habit: once a week, look at the list of cheques due in the coming week. Ask: does my account have enough for the ones going out? Do I need to take the ones coming in to the bank, or do they arrive on their own? This five-minute look prevents a lot of trouble.
Link the cheque to the invoice
When a cheque is cashed, it should be clear which invoice it settled. Without that link, the customer's balance doesn't match reality: you've received the cheque, yet the invoice still looks "open".
Ricordax has a cheque ledger for businesses: received and issued cheques with due dates and statuses, due-date reminders, and links to invoices and payments. Have a look at the business app.