A bank guarantee, often called a letter of guarantee (LG) in Saudi Arabia, is a bank's written undertaking to pay the beneficiary a set amount if your company fails to meet its obligation. This template keeps two linked logs: a guarantee register with each expiry date, and a cheque register for incoming and outgoing cheques with each due date and status. The sheet counts the days left to every date from today, so overdue items turn red and items due soon turn yellow.
Days to due date = due date − today; a negative number is overdue. In the sample, two cheques fall due within 7 days, one has been returned, and two open guarantees worth SAR 330,000.00 expire within 30 days.
How to use the cheque and guarantee register
- Log each cheque when you receive or issue it: type, drawer or payee, bank, due date and amount.
- Change the status as the cheque moves: deposited for collection, then collected or returned. A collected cheque leaves the open amounts.
- On the Letter of guarantee register tab, log each guarantee with its type, beneficiary and expiry date, and update the status on renewal or release.
- Open the Due-date report each week, write the actions needed and download it as a PDF for the finance meeting.
What goes in each column
| Column | What to enter |
|---|---|
| Type | In if the cheque is payable to your company, Out if your company drew it. |
| Due date | The date written on the cheque, not the date you received it. |
| Status | Pending, Deposited (for collection), Collected, Paid out or Returned. |
| Guarantee type | Bid bond, performance bond, advance payment, maintenance or letter of credit. |
| Cash margin % | Advanced mode: the share the bank blocked from your account against the guarantee, which gives the margin amount. |
What is a bank guarantee
A guarantee has three parties: the applicant who asks the bank to issue it (your company), the beneficiary who can claim the amount if your company defaults, and the bank that pays and then recovers from its customer. In the finishing works contract in the sample register, Bank Albilad issued a performance bond of SAR 210,000.00 in favour of Al Ufuq Real Estate Co. and blocked a 10% margin of SAR 21,000.00. If the works are not delivered as agreed, the beneficiary claims the amount from the bank.
Types of letters of guarantee
A bid bond goes in with a tender offer and is released after the award or when the offer is rejected. A performance bond is provided by the winning bidder and stays until handover. An advance payment guarantee covers money received upfront and reduces as the contract is delivered, and a maintenance guarantee covers the period after handover. A letter of credit is a payment instrument for imports; it sits in the same register because it also ties an amount at the bank to a date. You can download the register with all types as a PDF from its tab.
How to track cheques and guarantees without missing a date
The alert window is 7 days for cheques and 30 days for guarantees, because an extension needs both the beneficiary and the bank to agree. Change both in Settings in advanced mode; the Excel file uses the TODAY function, so the alerts refresh every day you open it. A post-dated cheque stays Pending until its date, and a returned cheque stays red in the open amounts until a replacement is paid.
How cheques and guarantees affect cash and the books
In the sample, open outgoing cheques total SAR 54,750.00 and open incoming cheques SAR 53,900.00, including a returned cheque of SAR 12,400.00 you cannot count on, so expected cash is lower than it looks. The advance payment guarantee for Al Waha Medical Group carries a 100% margin, which blocks the full SAR 85,000.00: it sits in the account but cannot be spent until release.
Common cheque tracking mistakes
- Marking an incoming cheque as collected on the day it is deposited, before the bank credits it.
- Deleting a returned cheque from the register instead of changing its status.
- Issuing outgoing cheques without checking the expected bank balance on their due dates.
- Letting a guarantee run on after the obligation ends without asking for its release, which keeps the cash margin blocked.
Legal and accounting notes
Presenting a cheque for payment and recourse against the drawer are governed by the Commercial Papers Law in Saudi Arabia, and a cheque is one of the instruments that can be filed with the Enforcement Court; check the current text and your legal adviser when a cheque is returned. A letter of guarantee is disclosed in the financial statements as a contingent liability, and a blocked cash margin is restricted cash, not available cash. The alert days on this page are internal settings, not legal deadlines.
When cheques are split between the safe and several banks
Microtec's ERP accounting system, built for businesses in Saudi Arabia, brings sales, purchasing, inventory and finance into one place, so cheque and guarantee dates sit in the same books as invoices and collections.
Frequently asked questions
What should I do when a cheque bounces?
Change its status to Returned so it stays red in the open amounts, ask the bank for a statement of the reason it was not paid, then ask the drawer to pay or replace it. If that fails, the cheque can be filed with the Enforcement Court; ask your legal adviser.
Can a letter of guarantee be extended?
Yes, at your company's request with the bank's approval, or at the beneficiary's request, who may ask the bank to extend or pay. That is why the register alerts you 30 days before expiry, and you can set the status to Renewal requested.
When is a bank guarantee released?
When the obligation it secures ends: the award or rejection for a bid bond, handover for a performance bond, and the end of the maintenance period for a maintenance guarantee. The beneficiary confirms the release to the bank or the original is returned, and the margin is unblocked.
How do I record bank guarantee fees?
The bank's commission for issuing or renewing a guarantee is a bank charge in your books, and the cash margin moves from available cash to restricted cash until release. Whether the commission is spread over the guarantee term follows your accounting policy and auditor.
Do the due-date alerts update in the Excel file?
Yes. The days column in the Excel file uses the TODAY function, so the alerts change every day you open the file without editing anything.