So, you have your checkbook in your hand and do not know how to write a check. Let us know what actually a check is and its advantages.
Check, which is also spelled as cheque, is a form of instruction to a financial institution (e.g. bank) to pay the amount specified, from a specific account mentioned to an individual or legal entity. The account can be owned by an individual or a legal entity.
It is one of the oldest methods of payment. It is considered as one of the effective ways of service and purchase. Doing payment by check is always safer than giving cash or using credit cards. Moreover, it can be used as proof or receipt if the check gets canceled.
The Steps to be Followed
The first thing to be done before writing a check is to confirm your account balance. You must make sure if you have enough money in your account to make the required payment. In case you do not have it, and you issue the check, it is considered as 'bounced check' and you may be charged a penalty for the same.
Thus, it's always wise to be on a safer side. Once you have confirmed that you have the required amount in your account, you can write a check. Date, Payee, Signature, etc., are some of the important fields to be filled.
Step 1 - Write the Date
It is the most important step. Write the current date in the space provided on the upper right corner of the check. See that you write the date in legible handwriting in any known format, preferably MM/DD/YYYY format. For example, 03/23/2014.
Step 2 - Mention the Payee
The name of the individual or the company to whom you are making the payment should be written in front of 'Payable to' or 'Pay to the Order of'. Always try to write the complete name and avoid writing short forms. For example, The Pizza Shop Inc.
Step 3 - Amount to be Paid
The amount that is to be paid is to be written in both numerical and in words. While writing the amount in numbers, it is always safe to start writing near the dollar sign, i.e., towards the left. This will leave no empty space and will avoid anybody from adding extra digits. After writing it in digits, write the same amount in words in the space provided.
The amount that is in cents, should be mentioned in fractions, in both numerical and in words format. For example, if the amount is $90.95, then you should write, 90 95/100 or Ninety and 95/100. Once you are done writing the amount in words, put a dash that will run all the way over to 'DOLLARS' written towards right side.
Step 4 - Sign it
Once you are done with filling the mandatory fields, it's time to sign the check. Sign your name in the space provided. See that the signature is easy to recognize. Memo is an optional field, and you can fill it in case you want to provide additional information.
It is simply a remainder that provides the reason for payment. For example, if you are paying the check to your house owner, you can write, 'rent'. Certain service providers may also ask to fill in the account number in this space.
- Always use pen to write the check.
- Keep a record of check numbers, payments, and new balance account.
- When you are going to write it, always keep a calculator with you.
- Draw lines in any empty spaces, especially after the amount to be paid.
- Avoid giving post dated checks.