Just because you have received your customer’s check, it does not mean your troubles are over. The title of this blog says it all: Don’t start celebrating until the check clears!
Back in the Stone Age when I was starting out, this used to take 7-10 days. If there are not sufficient funds (NSF) in your customer’s account, the check will not “clear” and will be returned to you. The amount of this check that you thought was deposited into your account will not be there.
While researching for this post, I recently had a talk with my bank on this issue and apparently check clearing happens a little faster nowadays. With on-line banking, you may have the option of monitoring your deposits to see the current status. According to my bank, a status of “Reconciled” for your deposit means that all checks in that deposit have cleared and the funds are available.
However, I have not tested this system thoroughly and I have a hard time trusting what I was told. In fact, to double check, I asked in-person at my bank and discovered that, as far as they were concerned, we are indeed still in the “Stone Age.” This person explained that the actual paper check deposited must go “in person” to its home bank and then be cleared there. If it “bounces,” the check is returned to your bank stamped “NSF.” Then, you are notified of this depressing fact sometime after that. AND the funds which you thought had been deposited will have been deducted from your account. I recommend that you talk with your bank about their on-line system to verify their policies.
Regardless, I would recommend that you still wait that “Stone Age” 7-10 days before you withdraw that money to take your ‘significant other’ out to a lobster dinner.
What has been your experience with checks clearing? Please let us know in the comments below!