Dear Zinner & Co:
Q: We have a bunch of old un-cleared checks on our bank reconciliation. What should we do?
-Ted E., Middle-market business owner, Solon, OH.
A: Laura Haines, CPA, Accounting and Tax Services ManagerTed, thank you for writing. Yours is a great question and one that many business owners should consider. The quick answer some would suggest is to simply reverse or void the checks. However, in order to comply with the Ohio Department of Unclaimed Funds rules, you must take a few steps:
- If the checks are payable to a business, or are payroll checks under $50, it is safe to reverse and clear the checks.
- If there are outstanding checks or credit balances due to customers (no matter how small), you need to take the necessary steps to try to get the funds into the rightful owner’s pocket.
- If the amounts owed are $50 or greater, there is a due-diligence requirement in which companies are required to send a notice to the last known address of the owner or beneficiary of dormant accounts informing them that there is money owed to them. If, within 30 days, that person does not contact the company to recover the funds, those unclaimed funds must be remitted to the Ohio Department of Commerce.
- For balances under $50, companies do not need to mail a notice; however, the funds must still be remitted with the company’s annual Ohio Unclaimed Funds Report. The Ohio Unclaimed Funds Reporting Form must be filed annually by November 1st.
As you can see, there are several issues to consider when determining what to do with un-cleared checks. We understand it can be confusing. If you have questions about this article, your business structure, or financial operations, contact me at [email protected] or call 216.831.0733. We’re happy to help and ready to start the conversation.