Definition of Exception item:
A term used to explain why a bank is unable to process payment on a check. A bank may be unable to process a check if payment has been stopped by the issuer of the check, the check is considered stale dated, a signature is missing, or there is suspicion of fraud.
Note that an exception item should not be confused with the accounting term "exceptional item", which is an infrequent charge incurred by a company that must be noted separately in its financial reporting.
An exception item is a banking term used to describe a check or other payment that cannot be processed or which is interrupted. Reasons for this obstacle may include the fact that a stop payment order has been made, a customer's account has been closed, there are insufficient funds in the payor's account, or the check is incomplete or missing a signature.
How to use Exception item in a sentence?
- Hold-ups can include simple mistakes like a typo or missing signature, to more structural problems like a stop payment or bounced check.
- An exception item, in banking, refers to a transaction that is unable to be fully processed.
- Once a tedious back-office process, software and automation have made identifying and rectifying exception items far quicker and efficient.
Meaning of Exception item & Exception item Definition