Lost Checks Should Be Stopped and Voided, Not Cleared
When a check is lost, the bank process and the accounting process need to stay aligned. In MIP®, the correct sequence is to place a stop payment with the bank, void the original check in Accounts Payable, and reissue the payment with a new check number if it is still owed.
Clearing a lost check short-circuits that process. The cash never left the bank, and clearing it creates a false sense of resolution. The stop payment and the void belong in different periods when timing requires it, and both periods should be reconciled based on what actually happened rather than what would have been convenient.
Handling lost checks this way keeps the audit trail intact. The original check remains visible until it is formally voided. The replacement check is traceable. Each reconciliation reflects the bank’s actions for that period without forcing the numbers to line up artificially.
This video is for accounting teams that want lost payments handled correctly without breaking reconciliation logic. It is not intended for organizations that clear missing items to make a reconciliation balance.
McGovern Consulting Group provides MIP Accounting® Training and Implementation Services. We focus on payment controls because small shortcuts around lost checks often create larger problems later.
If you want lost checks handled cleanly and defensibly, schedule time with us to review your Accounts Payable and reconciliation process.
https://mcgoverncg.com/schedule/
If you want to strengthen your MIP fundamentals first, free MIP® fund accounting training is available here.
https://www.freemipfundaccountingtraining.com/
#MIPAccounting #AccountsPayable #BankReconciliation #NonprofitAccounting #FundAccounting #AccountingControls
