Check writing has definitely become a lost art, and I am sure most people cannot even remember the last time they wrote a check.
If you are from the “check writing era,” you must admit that there was something about writing a check that made you feel so important and official. It felt like quite an achievement merely writing the name of the recipient, the dollar amount, and of course, the best part was embedding your signature at the bottom.
Granted, in 2019, a personal check isn’t what it used to be. The advent of technology, and most especially newer and more convenient modes of paying for your purchases has made this a dying practice.
So, why review this at all? Why take the time to teach a few of us how to write a check correctly?
Because, according to a report by the Feds, there were more than 18 billion checks drawn in the year 2016, and this number gives us proof that checks still have a place in our world today, and not only that, most companies still request payment by check.
Another reason is that; if you ever happen to be in a situation that requires you to write a check, a simple mistake on the check would cause it not to clear. In addition, if anyone ever issued you with a check, you can evaluate it and pinpoint where there are mistakes and have them corrected before depositing the check in the bank.
Before you write a check
A check shouldn’t just be written, and before you decide to do it, make sure that it is something that must be done. The process of writing a check is cumbersome, and, it is not always the fastest way to move money. In fact, you could write a check and end up spending the money in your bank account before it is even cashed and this can spell a whole lot of trouble for you later on.
If a check is deposited in an account that has no money, it will automatically “bounce.” This is never a good situation, and banks will definitely charge you for writing checks when you do not have enough money in the account. This is an unnecessary expense as it can overdraw your account.
So, when is it advisable to write checks?
When paying for bills online:
This is a good way of ensuring that your bills are always paid on time. You could postdate checks and ask the back to send them each month automatically. All you need to do is pay for postage, and they will take care of the rest.
When paying employees
For most business owners, using checks to pay your employees makes it easy to keep HR records, and ensure that you always have evidence of when the money was spent, and how much was paid. This helps in case there are disagreements later on.
How to correctly write a check:
Figure 1 sample of a well-written check.
The above figure gives you some insight into how a check looks like. In this guide, I shall show you how to fill in the areas that are required to be filled.
Writing a check, though easy can be confusing to a newbie. It can also cause you some nerves when writing one for the first time, and this tutorial will go a long way in helping you do this exercise as simply as possible.
A check has typically six distinctive places to fill in, as shown below;
Step by step guide:
The date is usually written on the top right corner of the check, and you need to fill out the current date, i.e., the day when you are writing the check. Ensure that this is correct in regards to the date, month, and year, because a simple mistake can cause some serious trouble.
Writing the current date also helps you keep track of your finances. There are instances where you can postdate a check, but a postdated check CANNOT be deposited in the back, unless you have a previous arrangement, and neither can it be cleared until the date on the check reaches.
Payee: – Pay to the order of:
This is the next section to be filled, and it is filled with the name of the person or company you are paying. If it’s a person, you shall be required to put their name on the space provided.
Always double-check the name of the person or call them to verify how their names are spelled because if there is an issue or the name is misspelled, the check will not be cashed.
Try and avoid writing checks to cash. This may seem convenient by its not always safe, and in case the check gets lost, anyone can cash it and get the money. It is essential to be wise to avoid losing your hard-earned cash to thieves.
Amount to be paid:
The amount to be paid is normally indicated twice. Once in numeric form and in words as well. The highlighted portion on the check above is where you put the amount payable in numeric form.
Be extra careful when filling this in, as you must ensure that the cents, full stops, and commas are well placed to avoid making mistakes that can easily cause the check not to clear. If there are no cents to the amount you are paying, include a full stop and two zeroes after, e.g., 123.00 to ensure that you have completely sealed off the amount, such that someone else cannot just add a coma and increase the amount.
Also, start writing as far over to the left as possible, e.g., if you are paying $7:50, let the seven be right up against the left side of the box, to prevent fraud.
Amount in words
See the highlighted portion: This is where you write the exact amount of money you put in the box above in words. You must fill the line that ends with dollars with what you wrote in the money box, and ensure that it is exactly as it is in figures.
This means that you must include the cents as well. If the two differ, the check is considered null and void and cannot be cashed.
Use all capital letters in this portion to make it harder to alter the information.
This is the section where you write the reason for drawing the check. In the above example, the check is being paid to Wal-Mart, for Grocery shopping. This is not a mandatory step when writing checks, but it helps you keep track of what you paid.
This has got to be the most important step in check writing. A check cannot be cashed if it doesn’t have a signature. You must use the signature that is on record with the back; otherwise, the check cannot be validated.
After writing the check:
After you have written the check and issued it to the payee, it is important to make a record of it. In fact, it is wise to always keep a copy of the same check just in case you may require it later on for whatever reason.
A check register is an ideal book to have. This is a register that enables you to record every check you have given out. A recording will also prevent you from spending the money twice.
This is actually quite likely because the funds in your account will always show as available unless the check has been cashed.
Benefits of having a check register:
To enable you track your spending.
Enable you to know where your money goes. A bank statement can do this too, but it will only show you the check number and amount. The description of the check is usually on the register for a better understanding.
Detection of frauds and identity theft. If you always have your check register with all the information that you put on check. It is quite easy for you to identify a check that you never wrote, and raise the alarm in case fraud was involved.
When recording check information in the register, ensure to capture the following;
- The check number.
- The date that you wrote the check.
- A small description of the transaction you were paying with the check.
- How much you paid.
Because the check register contains all the information on the check, it makes it easy for you to balance your checking account. This is the practice of double-checking every transaction in your bank account and ensuring that there were no mistakes.
This also helps you check how much money you have in your account, and who may not have cashed the check you gave them.
This is a very common and important exercise for people who tend to write many checks.
Additional check writing tips:
I am going to talk about security tips that can safeguard you from frauds and theft when it comes to check writing, which is very common.
Make it permanent:
When writing a check, it is wise to use a pen rather than a pencil. With a pencil, anyone with an eraser can easily change the amount on the check, and even the name on the payee. In most banks, the use of pencils on checks is actually not allowed.
Don’t issue blank checks:
A blank check is one where you have filled out everything else but the payee. This is quite dangerous and can expose you to many serious problems such as fraud.
If this blank check happens to get lost, anyone who finds it can simply fill in their name and voila! The check becomes theirs, and they are free to cash it.
Keep it from growing:
When you are filling in a check, ensure that the dollar amount is written in such a way that the value cannot be increased. What I mean is that; ensure that the figure of the check is written on the far left corner of the box. Let if fit completely and do not leave any spaces for fraudsters.
Make a carbon copy:
It is advisable always to make a copy of the check before you give it out. This provides you with a paper record of the check and also allows you to use it as evidence in case of a dispute.
Most people tend to have trouble when it comes to signing checks because they tend not to have legible signatures. Some even sign checks with humorous images that are not consistent with what is available in the bank.
I guess the best advice here would be to look for a good and legible signature that you can use at all times, and one that you won’t easily forget and cause your check to bounce.
Don’t make it a habit:
Unless you are a corporate entity, don’t make check writing a habit. In fact, write a few checks as possible.
Although checks are not as risky as you may think, there are other safer ways of making payments. When you make an electronic payment, there is no paper to be lost, and in addition, the evidence will be available forever.
Hopefully, this blog post will help you write checks correctly, and write checks that have zero chances of bouncing. Remember as I said that if a check bounces, you shall be charged by the bank, and in addition, the payee will also be charged.
Check writing is one of those things that everyone needs to learn, regardless of whether you shall make use of it or not. Just knowing that; if you are ever required to write a check, you shall be up to the challenge is reason enough to learn how it’s done.
Small mistakes can cause the check to be invalidated, and therefore, pay close attention to things such as writing the wrong name, ensuring that the amount in words and in figures are identical and of course, putting the right and correct signature at the bottom of the check.