Missing cheque numbers: how to find and explain gaps

Why gaps matter

Cheques (checks) are numbered so that every one can be accounted for. When the numbers in your books run 1041, 1042, 1044, the question is simple: where is 1043? There are only a few answers, and you want to know which one it is:

• It was written by hand and never entered, so an expense and a bank withdrawal are missing from your books.
• It was spoiled or voided on paper, but not recorded as void.
• It is still in the chequebook, skipped by mistake.
• It was lost or stolen, and someone may try to cash it.

The first one makes your bank balance wrong. The last one can cost you money. A regular check for gaps, usually at month-end next to the bank reconciliation, catches both.

How a missing checks report works

A missing checks report takes every numbered payment from one bank account, sorts the numbers and shows where the run breaks. In QuickBooks Desktop and in AcboBooks this report is called Missing Checks (in AcboBooks, Missing Cheques for a Canadian company). It usually shows:

• the first and last number used, and how many numbers are used,
• each gap: the missing number, or a range such as 1061 to 1063, with a count,
• each duplicate: a number used more than once.

It looks at whatever is in the number field: written cheques, bill payments, paycheques printed as cheques, refunds, tax payments. That is the strength of the report and its weakness. It cannot tell a real cheque number from any other number someone typed in.

Reading the report honestly

A report run for the first time often looks alarming. Before you panic, look at the size of each gap:

Treat the large gaps as information about your numbering, then work through the small ones. If a non-cheque number is in the sequence, clear it from the number field (or replace it with a letter code such as EFT) so next month's report is clean.

Explaining each gap

1. Check the chequebook or the stubs. A spoiled cheque marked VOID or a blank skipped cheque answers the question at once.
2. Check the bank statement. If the cheque cleared, the statement (or the cheque image in online banking) shows the amount and usually the payee. Enter it with the right date, payee and account. Your reconciliation will have been showing this as an unexplained bank withdrawal.
3. Record spoiled cheques as void. Enter the cheque with its number and void it, so the number is accounted for. A voided cheque keeps its number, so it no longer shows as a gap.
4. Ask whoever writes cheques. Hand-written cheques from a truck or a site office are the classic missing entries.
5. If you cannot find it, and it has not cleared, call your bank. A stop payment on a cheque that may be lost or stolen is cheap compared to paying it twice.

Keep a short note of each explanation. It answers your accountant's question before they ask it.

Duplicate numbers

A number used twice is the opposite problem, and just as worth looking at:

• The same cheque was entered twice: one copy is a duplicate expense. Compare the bank statement; void the copy.
• A bill was paid by cheque in the bill payment screen and the same cheque was also written as a separate cheque: keep the bill payment, so the bill shows as paid.
• Two chequebooks share a range: make sure each cheque is on the right bank account.
• A cheque was reprinted after a printer jam with the same number: keep one entry, and number the reprint with the next cheque in the printer.

Cheque controls for a small business

• Keep blank cheques and cheque stock locked away, and count them now and then.
• Enter every cheque in the books the day it is written, including hand-written ones.
• Never sign blank cheques.
• Have someone other than the person who writes cheques look at the bank statement and the cheque images each month.
• Use cheques only where you need them; online bill payment and bank transfers leave fewer paper cheques to lose.
• Ask your bank about positive pay or similar fraud services if you write many cheques. See how to print checks from your accounting software for printing controls.

In AcboBooks

The Missing Checks report (Missing Cheques for a Canadian company) is in the Reports menu. Pick a bank account and it shows how many numbered cheques it found, the first and last number, every gap with a count, and every number used more than once, with a CSV export. It reads the numbers on cheques, bill payments, paycheques, refunds and tax payments paid from that account. Voided cheques keep their number, so a void does not show as a gap. The report does not know which numbers belong to which chequebook, so a jump from one run of numbers to another, or a confirmation number typed into the number field, shows as one large gap: read it as described above. Books Checkup lists gaps of up to ten numbers and cheque numbers used more than once on each bank account.

Frequently asked questions