Outstanding Check

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DEFINITION of 'Outstanding Check'

A financial instrument that draws on the funds in an individual's or business' bank account but which has not yet been cashed or deposited by the payee. An outstanding check represents a liability for the payor. The payor must be sure to keep enough money in the account to cover the amount of the outstanding check until it is cashed, which could take weeks or even months.

INVESTOPEDIA EXPLAINS 'Outstanding Check'

Forgotten outstanding checks are a common source of bank overdrafts. One way to avoid this occurrence is to maintain a balanced checkbook. With banking activity becoming increasingly electronic, another way to avoid writing a check and forgetting about it is to use the checking account's online bill pay service, which should provide real-time information about the total dollar amount of checks outstanding and the total dollar balance presently in the account.

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