Timing differences Updated November 2026

Prior month outstanding checks

Start this month's outstanding checks list with every check still outstanding at the end of last month, tick off the ones on this month's statement, and add this month's checks that have not cleared. Last month's deposits in transit should all appear in the first days of the new statement.

Syntax

This month's OC = Prior OC not cleared this month + This month's checks not cleared this month

Part	What it is
`Prior outstanding list`	The closing list from last month's reconciliation; the starting point
`Cleared this month`	Prior checks that appear on this statement; remove them
`Still outstanding`	Prior checks not on this statement; keep them

Examples

March outstanding: #388 200, #390 450, #391 90
April statement clears #388 and #391
April checks not cleared: #402 1,000

Result: April outstanding list: #390 450 and #402 1,000, total 1,450.

March deposit in transit 700 appears on April 2 statement line

Result: Tick it; it is no longer a reconciling item. Do not record it again.

April statement balance 6,000; outstanding checks 1,450; deposit in transit 0
April book balance 4,550

Result: 6,000 - 1,450 = 4,550, reconciled.

Common mistakes

Starting from this month's checks only: last month's #390 would be forgotten and the reconciliation would be off by 450.
Counting a cleared prior check as still outstanding: tick each statement line against both lists.
A prior deposit in transit that did not clear: that is not a timing difference anymore; find out where the money went.

Practice Prior month outstanding checks

These drills check your answer on live data, free, no account needed.

Last month's checks arriveLast month's outstanding items are listed separately. Classify them too, then every line, and enter both adjusted balances.
Last month's depositLast month's outstanding items are listed separately. Classify them too, then every line, and enter both adjusted balances.
Carry-forward cleanupLast month's outstanding items are listed separately. Classify them too, then every line, and enter both adjusted balances.

Questions

Where do I find last month's outstanding checks?

On the bottom of last month's reconciliation, or in accounting software as uncleared transactions at the prior statement date.

Should last month's deposits in transit always clear?

Yes, usually within one or two business days. One that has not cleared by the next statement is a red flag.

Outstanding checksAn outstanding check has been written and recorded but has not cleared the bank. Subtract the total from the statement balance and carry unpaid ones forward.
Deposits in transitA deposit in transit is cash recorded in the books that the bank has not yet credited. Add it to the bank statement balance and make no journal entry.
Stale checksA stale check has been outstanding past the bank's honoring period, often six months. How to confirm it, void it, restore cash and the liability, escheat.
Bank reconciliation stepsThe steps of a bank reconciliation: tick deposits and checks, adjust the bank balance for timing items, adjust the books for bank items, match and post.