when a business writes a check it deducts the amount from the appropriate general ledger cash account if the funds have not been withdrawn or cashed by the payee the company s bank account will be overstated and have a larger balance than the general ledger entry 
to reconcile the bank statement so the company s cash account in its financial statements is consistent with the cash in its bank account the company must adjust its balance per bank which refers to the ending cash balance on a bank statement communicating outstanding checks to payeeas businesses have to abide by the unclaimed property laws any checks that have been outstanding for a long time must be remitted to the state as unclaimed property as such there is no incentive to wish for an outstanding check to permanently never be cashed as the payment is subsequently owed to the government for holding it is imperative for an issuer to provide payees with timely communication regarding the issuance of a check as well as any pertinent details as soon as possible this makes it easier to set expectations and gives them the opportunity to plan properly be mindful of post office conditions and potential delays for seasonality weather or staffing issues make sure that payees have access to the right contact information so that they can get in touch with you or your designated representative regarding any questions issues or changes relating to the overdue check check to see that the contact information is correct as checks may go missing simply because of an incorrect mailing address maintain a record of every communication pertaining to outstanding checks and make sure to document all conversation this includes communications such as emails phone calls and any other forms of correspondence in many cases companies send statements for invoices past due always check these against payments made in the system in case checks have been lost not applied correctly or mismanaged 