Understanding Check Management: Spoil vs. Void vs. Manual Check

In the world of financial transactions, managing checks accurately is crucial. Whether you’re dealing with printed checks, accidental errors, or changes to payment details, knowing the right action to take can save you time and prevent headaches. Let’s break down the differences between “spoiling,” “voiding,” and using a “manual check” function.

When to Spoil a Check

Think of spoiling a check as discarding a piece of paper that was intended to be a check but never actually became one.

Use Spoil when:

Checks were ruined and never printed. This includes instances where check stock was damaged (e.g., a printer jam, a spill, or an accidental letter printed on check paper) and therefore, the check was never officially issued.

How to Spoil Checks (in ProLaw):

Select Spoil Checks from the Actions menu.
To spoil a single check, leave the “To” box unchecked and enter only the check number.
To spoil a range of checks, click the “To” box and fill in the first and last check numbers. Each spoiled check will receive a zero Journal entry.
Select a date for the spoiled checks.
Optionally, alter the Description for the spoiled checks.
Click OK. ProLaw will make a zero-amount Journal entry for that check number.

Important Note: Since spoiling checks creates zero-amount entries with no impact on the general ledger, the spoil date isn’t as critical as a void date.

When to Void a Check

Voiding a check is like canceling a transaction that has already happened. The check was printed (or handwritten), but it will not be cashed.

Use Void when:

A check has been printed (or handwritten) but will not clear the bank. This could be due to a change of plans, an incorrect amount discovered after printing, or the payee no longer needing the payment.

Cautionary Notes for Voiding:

Do not use this feature to void payables. It’s specifically for checks that have been cut.
Do not use this function for checks that were ruined and never cut. For those, you should use the Spoil function.
Do not use this function if a check went out with incorrect details (amount, date, vendor) but ProLaw shows different information. For corrections like these, use the Manual Check function.

How to Void Checks (in ProLaw):

Select a payable on the check.
Click either the Void button or select Void from Actions.
Select the date for the reversing entries.
Click OK. ProLaw will automatically make the reversing entries.

After Voiding a Check:

Neither the original check nor the reversing entry can be edited.
The description of the original check will change to VOID.
The reversing entry’s description will be “Reverse check no. XXXX.”

Impact on Hard Cost Transactions:

If a hard cost transaction (for which the check was issued) is not yet billed, it will be deleted.
If the hard cost transaction has already been billed, a negative transaction will be created, providing the client with a credit on their next statement.

Critical Point: The void date is very important, especially if the check is voided in a different month than it was originally cut. This is crucial for accurate financial reporting, especially if your firm uses ProLaw for this purpose. Some systems may allow void dates in locked periods, but the reversing entry will typically not be dated in the locked period.

When to Use a Manual Check

The Manual Check function is your go-to for making corrections to check details that have already been recorded.

Use Manual Check when:

A check’s amount, date, payee, or any other detail needs changing after it has been issued or recorded. This applies when the check is valid and will be cashed, but the internal record needs adjustment.

By understanding these distinctions, you can ensure accurate and efficient check management within your financial system. Choosing the correct function for each scenario is key to maintaining clean financial records and avoiding discrepancies.

#ProLaw #ProLawBackOffice #Checks #Payables #ManualCheck #Void #Spoil