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Cheque Management

This guide covers the complete lifecycle of cheques in Kezi, from receiving a customer cheque to banking it, clearing it, or handling rejections.

What is Cheque Management?

Cheque Management allows you to track post-dated cheques (PDC) and current cheques separately from your cash and bank balances until they are actually cleared.

Why is this important?

  1. Post-Dated Cheques: Many businesses receive cheques dated for the future. You need to record the receipt but not increase your bank balance yet.
  2. Tracking: Know exactly which cheques are in your drawer (On Hand) versus which ones are at the bank.
  3. Handling Rejections: Easily manage bounced cheques without messing up your accounting.

Where to Find It

Navigate to: Accounting → Accounting → Cheques

You will see two main types of cheques:

  • Inbound (Customer): Money coming in.
  • Outbound (Vendor): Money going out.

The Cheque Lifecycle

Every cheque goes through a lifecycle. Just like a physical cheque moves from hand to bank, the system tracks these steps:

For Inbound Cheques (Customer)

  1. Draft: You are entering the details. No journal entry yet.
  2. On Hand: You have confirmed the cheque and it is physically in your possession.
    • Journal: Dr Cheques on Hand / Cr Customer (Accounts Receivable)
  3. Deposited / Presented: You have taken the cheque to the bank, but the money hasn't cleared yet.
    • Journal: Dr Cheques under Collection / Cr Cheques on Hand
  4. Cleared: The bank confirms the money is in your account.
    • Journal: Dr Bank / Cr Cheques under Collection
  5. Rejected: The cheque bounced.
    • Journal: Dr Customer (AR) / Cr Cheques under Collection (Reversing the payment)

How to Manage Cheques

Receiving a Cheque (Inbound)

  1. Go to Accounting → Cheques.
  2. Click Create.
  3. Select Type: "Inbound".
  4. Fill in the details:
    • Contact: The customer giving you the cheque.
    • Bank Account: The bank where you will deposit it (your bank).
    • Cheque Number: The number printed on the cheque.
    • Amount: The value.
    • Cheque Date: The date written on the cheque (Maturity date).
    • Transaction Date: Today's date (when you received it).
  5. Click Create. The status is Draft.
  6. Click Confirm to move to On Hand.

[!NOTE] The system automatically handles the accounting entries for each status change.

Depositing to Bank

When you go to the bank:

  1. Open the On Hand cheque.
  2. Click Deposit.
  3. The status changes to Presented.

Clearing or Rejecting

When you check your bank statement:

  • If the money arrived: Open the cheque and click Clear. The money is now in your bank account.
  • If the cheque bounced: Open the cheque and click Reject. The debt is returned to the customer's balance.

Outbound Cheques (Paying Vendors)

The process is similar but reversed:

  1. Draft: Preparing the cheque.
  2. On Hand: You wrote the cheque.
  3. Presented: You gave it to the vendor.
  4. Cleared: The vendor took the money from your account.

Best Practices

📅 Managing Dates

  • Transaction Date: When you physically got the paper.
  • Cheque Date: When the money can be taken. Always keep these accurate for better cash flow forecasting.

🔍 Regular Review

  • Filter by Status to see how many cheques are "On Hand" vs "Presented".
  • If a cheque is "Presented" for a long time, check your bank statement.

🔒 Security

  • Only authorized users should verify and change statuses to "Cleared".

Troubleshooting

Q: I made a mistake on the amount. Can I edit?

A: If the cheque is in Draft, yes. If it is On Hand or later, you might need to revert the status or cancel it first, depending on your permissions.

Q: Why isn't my bank balance updating?

A: The bank balance only updates when the status reaches Cleared. Before that, it is in a "Cheques under Collection" or "Cheques on Hand" holding account.