What is a Post Dated Check?

A post-dated check is a check bearing a date later than the date on which it is written or delivered. The writer generally intends the check to be deposited or cashed on or after the stated future date. Post-dating does not always prevent earlier payment, since banks can process checks presented before that date. Businesses sometimes use post-dated checks to coordinate payments with expected cash availability. Accounting treatment depends on whether the check has effectively been issued and whether payment can be enforced immediately.

When Post Dated Checks Are Used

Here are five cases in which it makes sense to issue a post-dated check:

Rent payments. Tenants sometimes issue post-dated checks to landlords for future rent payments, ensuring timely payments while coordinating with their payday schedule. This arrangement helps both parties manage cash flow and provides the landlord with a sense of payment security.
Installment payments for large purchases. When buying high-value items like appliances, furniture, or electronics, a buyer might issue a series of post-dated checks as part of an installment plan. This approach allows the buyer to spread out payments while giving the seller a reliable payment schedule.
Debt repayment agreements. If someone owes a personal loan to a friend or family member, they might use post-dated checks to fulfill a repayment plan. This method demonstrates commitment to repaying the debt and helps both parties keep track of payments.
Business contracts and services. Businesses sometimes issue post-dated checks to contractors or suppliers for services to be rendered in the future. This practice can help manage cash flow and ensure that payments align with project completion or delivery timelines.
Managing insufficient funds temporarily. If a person expects to have insufficient funds in their account until a future date (such as a paycheck deposit), they might issue a post-dated check to ensure it won’t be cashed prematurely, avoiding overdraft fees or bounced checks.

In these cases, post-dated checks serve as a practical tool for managing payments, aligning cash flow, and providing assurance to the recipient.

Accounting for a Post Dated Check

From the perspective of the check issuer, there should be no journal entry to record the reduction in cash until the date listed on the check. From the perspective of the recipient, there should be no entry to record the increase in cash until the date listed on the check. Thus, the date on the check effectively postpones the underlying accounting transaction.

Example of a Post Dated Check

ABC International receives a $500 check payment from a customer for an unpaid invoice on April 30. The check is post dated to May 15. ABC should not record the cash receipt until May 15, nor should it reduce the related accounts receivable balance until May 15. Thus, the post dated check has no impact on the financial statements of ABC International until the date listed on the check.

Practical Use of a Post Dated Check

Realistically, the recipient of a post dated check may never notice that the check has been post dated, and so will record and deposit it at once. The bank is also unlikely to notice the date on the check, and in any case may have a policy of honoring all checks at once, irrespective of the check date. In this situation, the check is considered a negotiable instrument, irrespective of the date, and it is likely that the recipient will receive cash from the bank prior to the date on the check. In such a situation, it is allowable for the check recipient to record a post dated check upon receipt of the check.

From the perspective of the payer, the best way to ensure that funds are not released early is to notify the bank not to release funds against this check any earlier than the date stated on the check.

Post-Dated Check FAQs

Is a post-dated check legally valid?

A post-dated check is generally legally valid as a negotiable instrument under U.S. commercial law. However, banks are not required to honor the future date unless the drawer provides prior notice to the bank. Enforceability and treatment can also vary based on state law and the terms of the underlying obligation.