Checks under collection
In one sentenceCustomer checks the business deposited in its account and recorded in its books, but whose value the bank has not yet added because they are still being collected.
Simply put
They are also called pending checks. When you deposit a check drawn on another bank, the bank needs time to collect it, so it appears in your books but not yet on the statement.
In the reconciliation you add them to the statement balance. If they take too long, make sure they were not rejected, because a returned check must go back to being a debt owed by the customer.
Worked example
An auto parts store has a bank balance of 95,000 SAR in its books and 70,000 SAR on the bank statement. On the last day it deposited a customer's check for 25,000 SAR that is still under collection.
Balance per statement70,000
+ Check under collection25,000
Balance per books95,000
Adjusted statement balance = 70,000 + 25,000 (matches the books)95,000 SAR
Don't confuse it with
Outstanding checksChecks under collection are checks coming in to you, while outstanding checks are checks you wrote to others.