Even if digital payments continue to increase in popularity, understanding how to write a check and choosing a check layout is still crucial. This article will walk you through the process of creating a check layout and filling out a check.
Checks don’t come with instructions, and if you make mistakes when writing one, it could affect you financially. This guide also covers the different parts of a check and also how to fill out a check.
Table of contents
What Is a Check?
An official check is a written, dated, and signed document instructing a bank to pay the bearer a certain amount. The person or organization who writes the check is referred to as the payor or drawer, while the recipient of the check is referred to as the payee. On the other side, the bank on which the check is drawn is the drawee.
Checks may be cashed or deposited. When the payee presents a check to a bank or other financial institution to negotiate, the funds are drawn from the payor’s bank account. It is another way to instruct the bank to transfer funds from the payor’s account to the payee or the payee’s account.
Checks are typically written against a checking account, but they can also be used to negotiate funds from a savings or other type of account.
READ ALSO: Can You Write a Check to Yourself? All you Need to Know
How Do Checks Work?
A check is a form of a bill of trade or other guaranteeing instrument for a specific sum of money. It is produced for use by the payor, an account holder at the drawing bank. The payor writes the check and gives it to the payee, who then takes it to their bank or another financial institution to have it cashed or deposited into an account.
By using checks, two or more persons can conduct a financial transaction without transferring physical money. Instead, the check amount serves as a replacement for actual money in the same amount.
Checks can be used to pay bills, make gifts, or move money between two people or organizations. They are typically regarded as a more secure alternative to cash when moving significant sums of money. A third party cannot cash a check that has been lost or stolen since only the payee has the authority to negotiate the check. Checks can now be replaced with debit and credit cards, wire transfers, and online banking.
Types of Checks
Here is an outline of the various types of checks.
1. Certified check
One illustration is a certified check, which confirms that the drawer’s account has sufficient funds to cover the check’s value. In other words, there is a guarantee that the check won’t bounce. A check must be given to the bank on which it is drawn to be certified, at which point the bank will confirm the check’s legitimacy with the payor.
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2. Cashier’s check
When a cashier’s check is signed by a bank cashier and guaranteed by the bank, the bank is held accountable for the monies. This kind of check is frequently needed in significant transactions, such as buying a car or house.
3. Payroll check
Another illustration is a payroll check, sometimes known as a paycheck, which a company provides to pay a worker for their labor. Electronic transfer methods like direct deposit have replaced physical paychecks in recent years.
4. Bounced Checks
A check that is written for a sum greater than the balance in the writer’s checking account cannot be negotiated. An example of this is a “bounced check.”
A check bounces because there are insufficient or non-sufficient funds (NSF) in the account, which prevents it from being processed (the two terms are interchangeable). The payor often pays a penalty fee when a check bounces. Sometimes a fee is imposed on the payee as well.
How To Select A check Layout Using LexisNexis
- Select Check Design under Setup and Manage.
- A new check layout can be created by clicking New, or an existing format can be opened and modified by double-clicking its name.
- To change the Check Design’s general Layout and Data properties, right-click anywhere in the check’s grey area and choose Properties.
- To add data fields, select Insert Data Field and sketch the field on the canvas.
- Select Properties using a right-click on the field.
- Choose the data you wish to display on the Data tab by clicking the drop-down list on the Control Source box.
- To format the field, select the Format tab.
- To add label fields, select Insert Text Field and sketch the field on the canvas.
- Double-click the field and type the label’s desired text there.
- To add a shape, select Insert Shape and create a field on the canvas.
- Select Properties using a right-click on the field.
- Choose the shape you wish to display on the Format tab by clicking the drop-down list next to the Shape box.
- To add a line, select Insert Line and draw it on the canvas.
- Rearrange fields, lines, and shapes by clicking and dragging.
- To save and close, click.
How To Select A Check Layout Using Microsoft Dynamics 365
- Choose the search icon, enter Report Selections Bank Account, and then choose the related link.
- On the Report Selection – Bank Acc. page, in the Usage field, select Check.
- Select one of the following report IDs.
| Report ID | Report Name | Description |
|---|---|---|
| 1401 | Check | This is the default report. |
| 10411 | Check (Stub/Stub/Check) | This report is designed to print checks in a stub/stub/check format. |
| 10412 | Check (Stub/Check/Stub) | This report is designed to print checks in a stub/check/stub format. |
| 10413 | Three Checks per Page | This report is designed to print three checks on each page. |
When you have set up check layouts, you can print checks from the Payment Journal page. For more details, see Work with Checks.
To change one of these default check layouts, use either the Word or the RDLC integration to do so. For more details, see Create and Modify Custom Report Layouts.
Related Post: STALE DATED CHECKS: How It can Affect Your Business
Check Layout Templates
Now you know how to create a check layout, you need to peruse a template to see what it looks like and how best to do yours.
Here are a few websites where you can find good check templates:
Steps On How To Fill Out A Check
The actions you must perform in order to correctly fill out a check are listed below:
- In the top right corner, type the date.
- Place the recipient’s name next to “Pay to.”
- Next to the dollar sign, enter the amount that has to be paid in numbers.
- The amount of the payment should be written in words (spelled out) on the long line.
- Put your signature where it says “Per” at the bottom right of the document.
- Add a note where “memo” or “re:” appear in the bottom left corner, if desired.
SEE ALSO: What Is An Outstanding Check? How To Handle Them
How To Write A Check
Let’s examine each of the aforementioned actions in more depth. After reading this tutorial and giving it a few tries, you ought to discover the procedure to be quite simple and natural.
#1 Date
Every check has a space to write the date in the top right corner; it must be the current date (the date at the time of signing the check). People occasionally post-date their writing by appending a future date. This has no bearing on the check’s legal tender status, which is established when it is signed.
Example: “Jan 1, 2018”
#2 Name
The name of the individual receiving the payment should be written as the next logical step. The name can be that of a person, a company (corporation), a trust, a university, or any other organization that has a bank account that can receive deposits.
Although in practice many banks will give some wiggle room on spelling, nicknames, and abbreviations, be sure to spell the name exactly as it appears on the document.
Example: “John Doe”
READ ALSO: HARD MONEY LENDERS: Definition, Best Lenders & How It Works
#3 Value
The monetary value that the receiver will receive is then to be written on the check’s right side. Write the total amount in dollars and cents using numbers.
Example: “$23,010.52”
#4 Value (in words)
Usually, it is simpler to put the value in words after first writing it in numbers. The figure you wrote in numbers should now be spelled out in words. Normally, only the dollar amount needs to be written out; the cents can be represented mathematically.
Example: “Twenty-three thousand and ten dollars and 52 cents”
Alternately: “Twenty-three thousand and ten and 52/100 dollars”
#5 Signature
Once you’re certain that everything is accurate, add your signature as the final step. Just as you would on any legal document, sign here. Typically, checks feature a line for the signing.
Example: “/SIGNATURE/”
#6 Memo
This step in the check-writing process is optional. You can add more information here if you’d like, such as what the payment is for. The bottom left corner typically has a small bit of excess room.
Example: “January Rent Payment”
Frequently Asked Questions
Without using a conventional checkbook or pre-printed checks from the bank, check printing software enables individuals and businesses to write, print, and mail physical checks or send digital checks. Other accounting and bookkeeping elements are frequently included in the software, including check mailing services, payment acceptance, and invoicing.
With the online option known as electronic checks or e-checks, a sort of payment conducted over the internet as an alternative to conventional checks, many online banking systems enable consumers to forego writing checks by hand and mailing them.
Check the stock paper, which is normally used with most printers and check printing software, is needed to print your own checks and is typically available at office supply stores or online.
Prices can range from free to $29.99 for a software download to hundreds of dollars per month for enterprise-level services, depending on the check printing platform you use. In contrast, a package of 150 checks might cost around $8.50, or around six cents each check.
References
- investopedia.com – Check
- docs.microsoft.com – Select a Check Layout
- corporatefinanceinstitute.com – How to Write a Check
- lexisnexis.custhelp.com – Check Design / Check Layouts
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