Expert: Arthur Naman - 6/10/2009

Question
Hi My customers Pay me cheques which are post dated say 2 months later against invoices raised on him.

Can I account these cheques and knock off the receivables from my account.  and show the chques in hand

If the customers give be Bill of exchange will the treatment be different.  

Answer
I do not believe the A/R should be recorded as paid until you have unrestricted access to the funds.

From your question, I am assuming you are not located in the US as cheques are commonly called checks and bills of exchange are not the norm. However, my point remains -- I do not expect the payment to be recorded as such until you have unrestricted access. Until then the payment might be recorded in an account with an offsetting account to track the receipt of the posted dated check or bill of exchange but with the offsetting account reflecting the funds being restricted.