A Post-Dated Cheque (PDC) is a cheque that the recipient can encash on a future date. Such cheques are not payable until the date written on the face of the cheque. In the accounting books of both the issuer and the recipient, the transaction will not be recorded until the date provided on the cheque. For businesses, the task of validating and keeping track of post-dated cheques, both issued and received, is tedious and time-consuming.
In business transactions, it is often a practice to use Post-dated cheques for payments at a future date. While recording the issue/receipt of such cheques, it is essential to keep a track of its realisation and thus reconcile with bank records.