Outstanding and stale-dated cheques: what to check in bank reconciliation
Check how long issued cheques have remained unpaid. Learn why a cheque older than six months may need follow-up without cancelling the debt.
A bank reconciliation regularly turns up cheques the business issued weeks or months ago that still have not cleared the bank. Before writing one off or forgetting about it, it helps to understand what "stale" actually means, and what it does not mean.
What a stale-dated cheque actually means
Payments Canada says a cheque is commonly considered stale-dated six months after it was issued. A financial institution may then refuse to pay it. This six-month practice concerns how banks handle cheques. It is not a legal deadline that cancels the debt the cheque was meant to pay.
A worked example of aging outstanding cheques
| Cheque | Issue date | Months outstanding at reconciliation | What this suggests |
|---|---|---|---|
| Cheque A | 6 weeks ago | About 1.5 months | Normal; many recipients simply have not deposited it yet |
| Cheque B | 4 months ago | About 4 months | Worth a follow-up call to the recipient before it approaches stale-dated status |
| Cheque C | 8 months ago | About 8 months | Likely already stale-dated at the bank; the debt still exists and needs resolving, not ignoring |
The number of months outstanding, lined up against the six-month convention, is what turns a routine reconciling item into something that needs a phone call or a reissued cheque — not an automatic write-off.
Why the underlying debt does not disappear
A cheque is an instruction to pay, not the debt itself. If it is never cashed, the business still owes the refund, reimbursement or supplier payment. That remains true even if the bank considers the cheque stale-dated. Usually, keep the liability, meaning the amount owed, in the books. It may move to a separate “cheques payable” account instead of staying in the bank reconciliation forever. Contact the recipient or reissue payment as appropriate. Do not erase the debt just because the original cheque is old.
Long-unclaimed amounts may fall under provincial unclaimed property rules
If reasonable efforts do not reach the rightful recipient, the money does not simply become yours to keep forever. For example, Alberta's unclaimed property program sets waiting periods and duties for those holding property, including certain unclaimed funds. Other provinces have similar but different programs. Check the relevant provincial rules, thresholds and reporting duties for a long-unpaid cheque you cannot resolve. Do not assume it can simply disappear from the books.
Bookwits can keep a task to follow up on an old outstanding cheque and a note of the decision. It does not track bank balances, reconcile transactions or decide obligations for unclaimed property. The bookkeeper handles those steps using the actual bank statement and applicable provincial rules.
Frequently asked questions
Does a stale-dated cheque mean the debt is cancelled?
No. Stale-dating is a banking convention about whether the bank will honour the physical cheque; the underlying obligation generally still exists and needs to be resolved, such as by reissuing payment.
Is six months a legal rule for every cheque in Canada?
It is a common convention reflected in how financial institutions commonly process cheques, not a single universal legal deadline; practices can vary by institution and situation.
What should be done with a cheque that has been outstanding for a very long time and the recipient cannot be reached?
Check the applicable provincial unclaimed property rules, since thresholds and obligations vary by province, rather than assuming the funds can simply stay with the business indefinitely.