The article outlines how outstanding lodgements occur, how they impact the reconciliation process, and why recognising them is essential for accurate reporting and effective financial control.
Outstanding lodgements and unpresented cheques create short-term differences between the cash book and the bank statement because transactions are recorded internally before they clear through the banking system. These timing gaps affect reconciliations, influence how balances appear at month-end, and can hide errors or irregular activity if not tracked properly.
What is an outstanding lodgement in accounting?
An outstanding lodgement, also known as an uncleared deposit, refers to money paid into a bank account but still absent from the bank statement at the reporting date.
This gap usually results from deposits made late in the day, at weekends, or during periods of high processing volume. The deposit is valid and has already been recognised internally, but the bank has not yet confirmed it.
For example, if a business deposits cash or cheques at the counter on the final evening of the month while the bank statement period ended earlier that day, the funds will not appear on that month’s statement. They will clear during the next banking cycle.
Further Reading: What is a nominal ledger? The ultimate guide for beginners
How to deal with unpresented cheques?
Unpresented cheques arise when a business issues a cheque before the bank statement cut-off date, but the recipient has not yet cashed it. Since the business has already reduced its cash book balance, but the bank has not yet deducted the amount, these cheques create another timing difference that must be accounted for during reconciliation.
To manage them, list every cheque issued before the statement date that does not appear in the bank’s deductions. This total is subtracted from the bank balance during reconciliation.
Alongside unpresented cheques, outstanding payments authorised but not yet processed may also create differences. These include scheduled transfers, regular debits, or supplier payments submitted for processing but not yet shown on the bank statement. Recording them promptly keeps the books accurate and prevents a misleading picture of available funds.
Regular reconciliation routines allow businesses to track these movements, avoid errors, and confirm that payments have been issued and received as expected.
Q&A: Why do unpresented cheques and outstanding payments matter during reconciliation?
They introduce timing differences between the cash book and the bank statement, so they must be noted to keep the reported figures accurate.
How does an unpresented cheque affect a balance sheet?
Unpresented cheques create a gap between what appears on the bank statement and what the business has already recognised in its own records. The bank still shows a higher cash balance because the cheque has not been cashed, while the cash book has already reduced the amount. This difference has to be brought into the reconciliation so the reported figure on the balance sheet reflects the real position. Until the cheque clears, the bank account line on the balance sheet looks slightly higher than it should, and the related payable remains lower. Unpresented cheques can also affect the timing of recorded receipts, as some incoming amounts may not yet appear on the bank statement even though they have been logged internally.
Further Reading: What is an Opening Balance? Your Ultimate Guide
What’s the difference between outstanding lodgements and unpresented cheques?
| Item | What it represents | How it appears in the business’s records | How it appears on the bank statement | Effect during reconciliation |
| Outstanding lodgements | Money deposited but not yet shown by the bank | Recorded as received | Not yet visible | The real balance is higher than the statement shows |
| Unpresented cheques | Cheques issued but not yet cashed | Recorded as paid | Not yet deducted | The real balance is lower than the statement shows |
What’s the difference between an uncredited cheque and an unpresented cheque?
| Item | What it refers to | Direction of money | How it appears in the business’s records | How it appears on the bank statement | Effect during reconciliation |
| Uncredited cheque | A deposit not yet credited by the bank | Money coming in | Recorded as received | Not yet shown | The real balance is higher than the statement shows |
| Unpresented cheque | A cheque issued but not yet cashed | Money going out | Recorded as paid | Not yet deducted | The real balance is lower than the statement shows |
Differences between the cash book and the bank statement
Usually the balance shown in the company’s cash book does not match the bank statement total due to several recurring issues:
Errors in the cash book
Mistakes such as missed entries, duplicated lines, transposed digits, or amounts written down incorrectly can distort the cash book balance. A deposit of £500 might appear as £505, or a withdrawal may be noted twice. These slips create gaps that reconciliation needs to uncover and correct. Careful recording, along with a habit of checking figures as they are entered, reduces the likelihood of these distortions.
Errors in the bank statement
Banks can make mistakes as well. A statement may show a deposit with the wrong amount, list a withdrawal twice, or include a transaction that does not belong to the account. Unusual or repeated items should be questioned straight away so the bank can amend the record. Reconciling regularly makes these issues easier to spot before they drift into later periods.
Unrecorded items
Some transactions reach the bank before they reach the company’s books. Cash withdrawals, card payments, standing orders, and online transfers may appear on the statement even though they have not yet been entered internally. These missing items must be identified and recorded so the cash book catches up with the bank’s activity.
Timing differences
Payments and receipts do not always move through the system at the same pace. Delays in paperwork, late posting, or end-of-day cut-off times can leave the cash book out of step with the statement. Matching transactions by date during reconciliation helps link items that belong together even if they appear in different periods.
Unpresented or outstanding cheques
Cheques issued before the statement date but not yet cashed by the recipient remain unpresented. Since the business has already reduced its cash book balance, these cheques must be listed and deducted during reconciliation. They stay on the list until they clear in the following period.
Outstanding receipts and payments
Some deposits or debits are expected but not yet processed. Standing orders, regular supplier payments, or direct debits dated before the statement cut-off may still be waiting in the system. These pending movements create short-term differences that need to be adjusted so both records show the same position.
Outstanding deposits/lodgements
Deposits made late on the statement day, or shortly before it, may not yet be credited by the bank. These outstanding lodgements must be added during reconciliation to reflect the amount the company has actually received, even if the statement has not caught up.
Q&A: Why do differences between the cash book and the bank statement matter during reconciliation?
They highlight gaps between internal records and the bank’s figures, so tracing these differences is the only way to reach a reconciled balance that reflects the company’s actual cash position.
Supporting accurate reconciliation with Wallester Business
Reconciling outstanding lodgements and unpresented cheques requires timely and reliable financial-management tools. Wallester Business is designed for just that. It’s a unified platform that improves payment cycles, expense tracking, and corporate finance management.
Here’s the way Wallester helps make reconciliation more accurate and efficient:
- Real-time transaction tracking. Wallester Business provides instant visibility into all corporate transactions via a unified dashboard or mobile app. This lets finance teams see activity as it happens, decreasing the chance that deposits or withdrawals go unnoticed when crossing the bank statement cut-off date.
- Instant issuance of virtual and physical cards. Since payments using Wallester-issued cards are processed immediately and logged in the system, this brings down reliance on manual cheque-based payments, which are more prone to being unpresented or causing timing differences.
- Automated accounting integration and export. Wallester supports integration with accounting systems, allowing transaction data to be exported directly and matched against cash book entries.
- Unified platform for all expenses and payments. All corporate payments are routed through one system, so there’s less risk of “hidden” or unrecorded items slipping through the bookkeeping cracks.
- Improved control and transparency. With features like spending limits, shared virtual cards, and centralized expense logs, finance managers can more easily track pending deposits or payments that might not yet appear in the bank statement.
Ready to simplify your reconciliation process? Discover how Wallester Business can eliminate timing differences, cut manual errors, and give you real-time visibility into every transaction. Explore our corporate payment solutions and start improving your financial management today.
