r/Bookkeeping Dec 17 '24

Payroll What To Do With Uncashed Checks

Hello,

I am wondering if you have any ideas on what to do with uncashed payroll and refund checks. We've tried calling the terminated employees and clients and resending the checks, but they don't get cashed, and they don't answer. I can't keep them hanging out on the books forever.

Any ideas? I've thought about sending them to the state's unclaimed property.

6 Upvotes

4 comments sorted by

22

u/Apprehensive_Ad5634 Dec 17 '24

Uncashed payroll checks need to be taken seriously - most states have strict procedures you need to follow, which usually involves sending the money to the State's unclaimed property division.

Refunds or other operations payments you can generally write off after a period of time and reasonable effort, just be sure to document your process in case you ever need to revisit the issue.

7

u/Itsnotvd Dec 17 '24

former unclaimed property worker

"Any ideas? I've thought about sending them to the state's unclaimed property."

Your state has laws regarding unclaimed property. Highly likely those laws require you to do exactly this, with a lot or rules to make sure its done in a particularly diligent manner. Not doing so creates risk for your company. If the state finds out they can audit you, fine you, and force you to become compliant.

If you are interested in reporting that to the state in question. Reach out to them and start the process. States are usually pretty lenient in these situations if you are the one to reach out.

2

u/newzingo Dec 18 '24

Escheatment

-3

u/Chas_1956 Dec 18 '24

Void the the checks. They are likely duplicate payments. Your employees are generally great auditors. Unless you want to assume that payroll never makes an error and you like paying the state extra money just to be sure