Accounting for Post Dated Checks

by Marquis Codjia ; Updated September 26, 2017
A post-dated check indicates a promise to pay at a later date.

A post-dated is a common business practice that allows a corporation to show a commercial partner, such as a lender or a supplier, that it intends to pay a certain amount at a given point in time. Post-dated checks are pivotal elements in some business activities, such as export and import, because they guarantee payments to commercial partners.

Post-dated Check Defined

A post-dated is a negotiable instrument that allows a party to a contract (for example, a customer or borrower) to indicate to the other party (supplier or lender) its promise to pay at a given date. For example, a department store wants to purchase $1 million worth of merchandise from a major supplier. The store's accounting manager notes that cash available at the bank is $325,000. He may issue a post-dated check negotiable within a month because he expects customers to pay $2.5 million within 15 days.


Post-dated checks play a significant role in modern economies. Similarly to credit cards and bank letters of acceptance, they help an individual or a company receive goods or services and pay for them at a later date. This business practice is important because even profitable companies often have liquidity problems resulting from customers' delayed payments. As an illustration, a company that expects a customer payment of $200,000 in 10 days may issue a post-dated check negotiable in two weeks.

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Accounting Procedures

Generally accepted accounting principles (GAAP) and cash accounting methods treat post-dated checks the same wayĆ¢??no journal entry recording. A post-dated check is essentially a promise to pay, and until the business partner pays or reimburses amounts owed, no change is made in accounting books. To illustrate, an accounting clerk receives a $45,000 post-dated check negotiable in one week. She cannot debit cash (asset) and credit sales revenue or accounts receivable to record this transaction because no payment is made. She can, however, write a memo about the post-dated check in the accounting ledger. (Bookkeepers debit asset accounts to increase their balances and credit revenues to increase their amounts.) If the check clears the customer's bank after one week, the clerk may then record journal entries in the sales ledger.

Financial Statement Rules

Post-dated checks do not affect financial statement accounts, but regulatory guidelines and industry practices require a company to reveal significant amounts that it expects from customers at future dates. These amounts may relate to post-dated checks or promissory notes. GAAP requires a corporation to prepare accurate and complete financial statements that indicate such arrangements. Complete financial records include balance sheet, statement of profit and loss (P&L), statement of cash flows and statement of retained earnings.


A post-dated check is essentially a negotiable document, and as such, a company or an individual may deposit it before the due date. The bank may honor the payment if the customer has sufficient funds in his account.

About the Author

Marquis Codjia is a New York-based freelance writer, investor and banker. He has authored articles since 2000, covering topics such as politics, technology and business. A certified public accountant and certified financial manager, Codjia received a Master of Business Administration from Rutgers University, majoring in investment analysis and financial management.

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  • check and pen in close up image by Alexey Klementiev from
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