Checks are not as common as they used to be but they are still very widely used. Even in this digital world, it is still important and beneficial to understand the basics are when it comes to how to write a check.
In this simple guide, we outline what you need to know to understand checks and how to write a check. Including; date, payee, amount in words, amount in numbers, signature, memo. Below we drill down into these important details.
How to Write a Check
1. Begin With The Date
First of all, remember that a check is a legal tender so make sure that the date you entered is correct. There are two types of checks: current-dated and post-dated.
Current-dated checks are the checks you date as you signed them. If a check is current-dated, it means that the payee is able to cash it in anytime he or she presents it for as long as it does not become stale. Stale checks are those that are not presented within a reasonable time.
Post-dated checks are those that are made for a future date. For example, you could sign the check on December 1, 2020 but date the check October 1, 2021. This means that although a payee already has the check, he or she can only cash it on October 1, 2021.
2. Define The Payee
A payee is a person or company for whom you are writing the check for under the line that says “Pay to the Order of” or simply “Pay To”. One thing that you must always remember when you write a payee’s name is to not make a mistake.
Make sure to write the full legal name of the payee. If it is an organization, ensure that you are not abbreviating. Most of the time, when you write the name of the payee, it should be the same as the account name that the person or organization is having at the bank they are banking with.
A check can also be made out to “cash”. This means that anyone can present the check to the bank.
3. Write The Amount In Numbers
Always ensure that you are writing the exact dollar amount of what you are paying, including the cents as well.
You can put the amount in words on the same line as the payee. Be sure to write as far left, as the box allows in order to fit in all of the numbers.
4. Write The Amount Amount In Words
When writing the amount in words, it should be exactly the same, as the amount you have written in numbers including the cents. Failure to match both amounts can make your check invalid.
There are two different ways for you to write amounts in words:
Take for example the amount of $5,329.50.
You could write it as: Five Thousand Three Hundred Twenty-Nine Dollars and Fifty Cents.
You could also write it as: Five Thousand Three Hundred Twenty Nine and 50/100 dollars.
Either way is acceptable.
5. Include Your Signature
Your bank will have your signature on file. It is important to make sure that the same signature that you use to sign your checks is the same one that your bank has on file. Otherwise, the check you issued will be deemed invalid.
Your signature should be written legibly in the lower right portion of the check. The reason why you should sign your own check is because it signifies your consent of payment and provides authority for the bank to cash the check.
6. Complete The Memo Section
Filling out the memo section of the check is completely optional. However, it is helpful to provide information in regards to what the check is for. This provides clarity for both you and your payee.
An example of this may be that you are writing a check to pay your rent. Stating your address on the check and that it is for October’s rent, assists all parties understand what the check is for.
Once you have written and issued your checks, it is just as important that you are able to properly track and reconcile your checks. When we say track, you should be able to input all details in your check register. Make sure to note down the check number, check date, payee and amount so that you are immediately notified if you have a check that is missing or if you need to reorder a new check book.
Your bank will issue you with a bank statement regularly and based on the check register that you recieve, you can match the transactions you have entered in your check register to the bank statement. Doing this will give you an indication of whether or not all of the checks that you have issued have been cleared or are still outstanding. This will provide you with an understanding of the actual balance of your account.
The most important thing to remember when it comes to writing a check is to never sign a blank check. A blank check within the wrong hands, could result in you losing all of your hard-earned money just like that. Store your check book properly and safely because a check is also considered as cash.