How to Track Cheques and Promissory Notes?

In businesses working with checks and promissory notes, the most expensive mistake is missing a due date. A check not sent for collection, an unpaid note, an asset left forgotten — they all come with a price tag.

Most businesses track these in Excel. It works up to a certain volume; then a date slips.

Two directions, two logics

Checks/notes you receive are the counterpart of your receivables. These are a promise of revenue for you, and they need to be collected on their due date.

On the other hand, checks/notes you issue are the counterpart of your payables. You need to have sufficient funds in your account on the due date.

It is essential to view these two flows separately. When the due dates of the checks you receive and the checks you issue overlap, an unpaid receivable results in an unpaid payable — and that is where the chain reaction of problems begins.

The three states of a received check

When a customer gives you a check, you can use it in three ways:

Holding in the portfolio. The check waits with you, and you submit it to the bank for collection on the due date. The simplest scenario.

Endorsing. You transfer the check to your own supplier as payment. It is no longer in your hands, but your liability continues: if the check bounces, you may still be held liable as an endorser.

Discounting with a bank. You convert it into cash early without waiting for the due date, in exchange for a cost.

These three situations differ in terms of tracking. Thinking that an endorsed check is still in your portfolio is one of the most common tracking mistakes.

Why Excel is not enough

An Excel spreadsheet is just a snapshot; it won't warn you unless you open and look at it. If you forget to open the sheet when the due date arrives, the check remains uncollected.

The second issue is not linking the check to the current account. You received a check for 50,000 TRY from a customer; if this check bounces, your receivable is revived. If checks and current accounts are on separate tables in Excel, this connection is lost.

Thirdly, the status history of the check. A check can follow a path like "in portfolio → endorsed → bounced → returned". It is impossible to track this in a single cell.

The backbone of cash flow

Checks and promissory notes are essentially cash movements dated for the future. When tracked correctly, they automatically generate the cash flow table for the coming weeks.

When you place the amount of checks you will collect on a specific day side-by-side with the payments you need to make, you can spot cash crunches weeks in advance.

We explained how to set up this view in our article on upcoming collections and payments report. For managing overdue receivables, you can check out this article.

Linking checks and notes to their respective current accounts also makes reconciliation easier; take a look at the article on current account tracking.

Frequently asked questions

What should I do if a check bounces?

You need to present the check to the bank and have it officially marked as bounced for both legal tracking and accurate updating of the current account balance. Since your receivable is revived, your records must reflect this.

Can I pay an invoice with a post-dated check?

You can make payments by endorsing a check. However, keep your endorser liability in mind; if the check you transferred bounces, the counterparty may come back to you.

Is the difference between a check and a promissory note important for tracking?

A check is a payment instrument payable upon presentation, while a promissory note is a deferred debt document. Legal tracking procedures differ; however, the logic of due date and collection tracking works similarly.

Can someone without a checkbook work with promissory notes?

Yes, promissory notes do not require a banking relationship. This is why notes are more common among small businesses that do not have checkbooks.

Check and promissory note tracking is less about updating a spreadsheet and more about managing a due-date calendar. When set up correctly, missed due dates and cascading payment issues are largely eliminated.

Open a free account on Qolay.App to track the assets you receive and issue along with their due dates.