Small Business Accountants

What are Bank Deposits and depositing cheques?

UK businesses can deposit cash at a bank branch or participating Post Office, while cheques are increasingly deposited by taking a photo through the bank's mobile app under the cheque-imaging regime. Most UK banks have moved cheque clearance to the two-day Image Clearing System, meaning funds usually become available the next working day. Every deposit should be recorded in the bookkeeping and reconciled against the bank statement.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 1

What are Bank Deposits and depositing cheques? - GoForma Small Business | UK Accountants & Tax Advisors

Key takeaways

A bank deposit is any credit placed into your account, including cheques, cash, BACS payments and card receipts. Each method has different clearing times and bank terms.
UK cheques now clear within one full working day under the Image Clearing System that came into effect in 2019. Most high-street banks process them on the next business day.
Most UK banks offer mobile cheque deposit through their app. You photograph both sides and submit within the app, removing the need to visit a branch for most cheques.
Banks may apply limits or fees to large cash deposits, particularly for business accounts. Anti-money laundering regulations require banks to carry out checks on significant cash lodgements.
Every deposit must be recorded accurately in your bookkeeping, matched to the correct income category, and reconciled against your bank statement each month.

A bank deposit involves placing money into an account with a banking institution. Depositing a cheque is one way to make a deposit. You can also deposit cash or make a funds transfer.

Frequently asked questions

What is a bank deposit?

A bank deposit is any money placed into a bank account. For businesses this includes cheques received from customers, cash takings, BACS and CHAPS transfers, card terminal receipts and online payment transfers. Each method arrives in your account at different speeds. Accurately recording every deposit against the correct income category is essential for clean bookkeeping and accurate tax reporting.

How long does it take for a cheque to clear in the UK?

Since the rollout of the Image Clearing System in 2019, most UK cheques clear within one full working day. This means a cheque deposited on a Monday should be available by Tuesday. Previously, cheques could take up to six working days to clear. Some banks may still hold funds for longer on a risk basis, so check your bank's specific terms if you need certainty on timing.

Can I deposit a cheque using my phone?

Yes. Most UK high-street and challenger banks offer mobile cheque deposit through their banking app. You photograph the front and back of the cheque and submit it digitally. The cheque still clears within one working day under the Image Clearing System. Check your bank's daily or monthly deposit limit for mobile cheques, as some banks cap the value that can be deposited this way.

Are there limits on how much cash I can deposit?

Banks set their own limits on cash deposits, and these vary by account type and provider. Business accounts often have lower free deposit allowances than personal accounts, with fees applied above a threshold. Depositing large amounts of cash regularly without a clear business reason may prompt your bank to carry out anti-money laundering checks under the Proceeds of Crime Act 2002. Keep records of where cash income originates.

What are anti-money laundering checks on cash deposits?

Under UK anti-money laundering regulations, banks are required to monitor and report suspicious cash activity. If you regularly deposit large sums of cash, your bank may ask you to explain the source. This is a standard due diligence requirement rather than an accusation. Keeping clear records of cash sales, receipts or other legitimate income sources means you can respond quickly and avoid account restrictions.

How do I record a bank deposit in my bookkeeping?

Each deposit should be matched to a corresponding invoice or income record in your accounting software. For cash deposits, record the date, amount and source before banking the money. For cheques, note the payer name, invoice number and deposit date. Run a bank reconciliation at least monthly to ensure every deposit in your accounting records matches your actual bank statement and nothing has been missed.

Do business account deposits work differently from personal account deposits?

Business accounts often have separate terms from personal accounts, including transaction fees per deposit, cash handling charges and different daily limits on mobile or counter deposits. Some business accounts charge per-cheque fees. Review your business account's fee schedule and factor deposit costs into your pricing if cash or cheque payments make up a significant portion of your revenue.

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