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Origin of Check or Cheque: –
At the very beginning, people didn’t know how to write a check as we know it today. But the first concept to write a check was very amazing that the first known check was handwritten and that is still in existence. That check was pinched on Messrs. Morris and Clayton, litterateur and bankers based in the City of London. And that was the date of 16th February 1659.
What do you mean by Check or Cheque?
It is the type of document used by a bank account holder to pay money in the bank account of another bank account holder’s account. Simply, a check is an order to the bank to pay a specific amount of money to the person whose name is mentioned in that check. While writing a check the drawer (person or firm who is writing the check/cheque) must write various details on it such as date, an amount which he is paying, signature, name of the drawee (person or firm who is receiving the check/cheque) and memo.
Many people already know how to write a check but many of them didn’t know the proper step to write a cheque.
So, today you just relax and get the proper guide to writing a check in proper steps.
Steps involved in how to write a Check or Cheque?
Checks/Cheques are being used very widely in the whole world. Writing a check is obviously very easy but many checks are being invalid due to some small mistakes while writing a check. So, let’s get to know the step by step process to write a check in a very simple way.
Let’s get started.
1) Write Current date in the Top Right Corner:
Be sure that you are writing correctly as well as the completion date. In general, you may use the current date but if somewhere needed, then you may also use postdate at the check’s right corner where the line is labelled as “Date”.
For example: – If today is the 13th of September 2021, then you may write it in these ways
- Sept. 13, 2021
2) Write the Name of Beneficiary:
Now, if you take a look at a check then you will find a line labelled as “Pay to the Order of”. It is the next step. Here, you must write fully as well as the proper name of the person or organization to whom you are paying.
For example: – Suppose you are paying to Mr Christopher Johnson then, you are not allowed to write only Mr Christopher. Here you must have to write the beneficiary’s full name i.e., Mr Christopher Johnson.
3) Write Amount in Number:
At the right-hand side of the check, you may see a line with a sign of dollar “$”. In this space, you must write the exact amount of dollars which you are paying. Always remember that you never have to estimate the amount. You should always be very clear about what exact amount you are paying.
You may write it like $122.07
4) Write Amount in Words:
Now, you must write the same amount which you have written above as a form number. It is done to avoid fraud as well as confusion about the amount. It is also known as the official amount because in case if the amount you have written in numeric form in words doesn’t match then the amount which you have written in a word will be taken into consideration legally.
For example: If you are paying $122.07 then you must write it in words like “One hundred twenty-two and 07/100 Dollars”.
5) Write Memo if you want:
Writing a memo in a check is completely optional in nature. It is on the left-hand side at the bottom of the check. Here you can write a note about why you are paying.
For example: If you are paying $122.07 to Mr. Christopher Johnson as a house rent then, you may simply write “house rent” in the memo line.
Once all the things are done and you have written your check then you must make a record of payment for future references. And also, you may protect yourself by paying money twice for the same thing.
6) Sign the Check:
It is the most important part of the check because the check remains invalid if you left the line of sign blank. And the check also is invalid in the condition if your signature doesn’t match the sign which you have saved for your bank account.
Why do people find it hard to write a check?
Nowadays it has become too convenient to replace checks with your online banking, different payment apps like PayPal, Zelle, etc. Having Debit cards, ATM cards, Credit cards make it much simpler to withdraw cash without having any paperwork. So, many people prefer to use these cards as compared to using checks.
If you are the type of person who is more likely to do transactions with checks then, you always have to take care of your cheque book. If the pages are running out in the cheque book, then you have to go to the bank and request the new cheque book.
What are the Common Mistakes While Writing a Check or Cheque?
While writing a check you may think you have done everything perfectly. But you have made the check the wrong way and there is something wrong with your check. I have taken some of them from it such as:
- The Date is incorrect: While writing a check people just focus on writing the beneficiary’s name and at last, they forget to write the date on the check. Sometimes dates are mentioned but unfortunately, it gets wrong as they may be post-dated or predated.
- The Numeric and Figure amount doesn’t match: Next mistake is matching the amount which is written in the figure with the amount written in words. Some people just write the exact amount in figures and estimated amounts in words, but these things are not accepted in banks.
For example: If you have written $12.32 in figures then you have to write “Twelve and 32/100 Dollars” not only Twelve Dollars.
- Forgot to do signature: Amazingly, some people have done everything very neatly and correctly, but they forgot to do signature on the check. And as to the bank rule if the check is not signed by the account holder, then it can’t be accepted by the bank.
- Overwriting on check: While writing a check if you made any mistake then you must use another check to rewrite or if there is a very small mistake then you may correct it neatly and sign over there so it will confirm the bank it was done by you.
As checks are documented for monetary purposes so any suspicious thing can’t be afforded in it. That’s why you must always avoid overwriting checks, doing scratches and so on.
- Multiple handwriting: Another stupid mistake is to using multiple handwriting. It may be by using different pens, checks filled by more than one person, etc. These silly mistakes are not accepted by the bank so to avoid these situations always use a single ball pen to write a check and second thing is that always write your check yourself. And as a matter, if you don’t know how to write a check then you must read and understand all the six steps to write a proper check.
- Wrongly Signed: This is a very common mistake. As people just sign the check as their regular signature. But the bank didn’t accept that signature. Banks only accept the signature which is matched with the signature which you have previously given to the bank as the sample.
- Avoid Signing on MICR Band: You always take care of the space where you are signing. Always avoid signing on the MICR Band of the check because it may result in the cancellation of your check.
- Having insufficient funds in a Bank Account: When you are writing a check and giving it to the beneficiary, always make sure that you have sufficient funds available in your bank account. As a matter, if you fail to maintain proper funds in your account then your check may be subject to bounced and for that, you may also have to pay a fine.
What are the Merits & Demerits of Checks or Cheque?
Like many of the several things checks/ cheques also come along with their own merit as well as demerits. Today, we will discuss five common merits as well as demerits of the check.
|It becomes a merit to the drawer as it takes approximately 5 working days to clear.
|On the other hand, it becomes a disadvantage for the receiver as he has to wait for approx. 5 working days to clear the check.
|Easy and convenient to use.
|Not accepted by some small retailers for small payments.
|Provides more security.
|To clear a check, one should have to wait for the opening of the bank.
|Used for doing payment of huge amounts with minimal risk.
|The drawer has to maintain the chequebook very carefully.
|No need to carry cash to make a large payment.
|If your signed check is lost or stolen, you may have to bear the loss.
Check is a very useful financial instrument. As it makes us more secure, reduces the risk of loss, etc. But as it has many advantages it also comes with some of the disadvantages such as if a person doesn’t know how to write a check, then it will be quite difficult for him to clear a check. One should always take care of their cheque book, signature, writing, etc. While writing a check one should always follow the proper steps involved in it.