Check writing is the process where you instruct your bank to transfer funds to another account, either in the same bank or a different one. The amount in the bank account should cover the stated check amount unless authorized for bank overdrafts. A bouncing check without enough funds in the bank account to clear is an offense that attracts penalties from the person cashing it and the bank.
The basic information that you must pay attention to in check writing is as outlined below.
Date: The date appears in the upper right corner of the check. It helps you and the check recipient to have accurate records of the payments.
Payee: Payee is the person or the organization the money paid to with the check. The ‘Pay to the order of’ clause records the payee details.
Amount: The amount written in numerals and words in all checks. A small box on the right-hand side of the check slip records the amount in numeric form. The amount is then written in word to avoid confusion and fraud. To prevent anyone altering the check, write in capital letters which are harder to change, and draw a line after the amount to fill the space left.
Memo: A memo is a place on the check where you add relevant information about the payment. A memo recording is optional and can give details of the payee account number. It also serves to provide reference if the check and payment stub are separated. A memo can be beneficial in the future for your taxation records.
Signature: A check cannot be valid without a signature. As the writer of the check slip, sign on it legibly at the bottom right corner line. The signature and the one on the bank account should match. If their multiple signatories, any authorized person can sign the check.
After writing and signing the check, note the date, payee, check number, and amount in the check register at the front of the checkbook. The check number appears twice, at the top right corner and the bottom center. All checks contain a routing number used by the bank to facilitate electronic clearing of the payment check and contain nine digits.