How You Should Be Documenting Your Outgoing Business Checks

How You Should Be Documenting Your Outgoing Business Checks

Kyla Nievera, NegosentroUnless you want to write out all of your business checks one by one by hand, you’re going to need a professional printer, or at least software that can generate all outgoing checks. There’s the vendors that you need to pay, customers your company has to reimburse, and of course, employee payroll that should be kept up with. Having a paystub maker on your business computer that you and others at your company may use to have employee payroll checks and stubs typed up and printed will also help with maintaining accurate documentation. In essence, it isn’t very ideal to need to pay for business check printing when you only have a few parties being paid at a time. This is the information that should be recorded and checked when you are generating business checks in your office.

What Goes On the Pay To Area

Generally, the payee area of business checks has the name of the person being paid, and oftentimes their address, and if applicable, employee or account number. The payee area is also what banks use to confirm the identity of the person being paid. Although it is not technically your concern if the payee has identification that matches what appears on your business checks at the time that they cash them, you should ask the payee if the business check looks correct when you issue it. Professional business checks that have an invoice or paystub attached can also be mailed as and when the payee is correct and complete, so they can be sent out more conveniently.

Recording the Invoice Number

If you’re printing up business checks to go to merchants, employees, or contractors, a unique invoice number should appear in the corner of every check. Using sequential invoicing will aid with figuring out when a check has not been accounted for or not cashed, and it will overall make bookkeeping a lot more simple. As you print up new business checks, be certain that your records reflect who the outgoing payment is going to, how much is being paid out, and the date that the payment has been issued.

Getting the Payment Amount Right

This part of the business check issuance process is really critical. All payments made to employees and vendors need to reflect the correct amount that is due to them. Put in one too many zeros and a payment that should be for hundreds will turn to thousands. Not only may you have trouble pulling the check back, if it gets cashed before your error is noticed, you’ll have to try and get your business bank to help with the domino effect that has been created. At the very least, the check will need to be cancelled and then re-issued with the correct payment amount reflected. So just look at all outgoing business checks and confirm that the payment amount isn’t for too much or too little.

Double-Check the Date

For some reason, there are still businesses and even consumers that write checks that shouldn’t be cashed right away. If there are accounts payable and you don’t have the money in your business account needed to cover the payment withdrawal, don’t think that post dating a business check is going to buy you more time. As soon as a check is issued, the bank can honor it and take out the money right away. Likewise, checks have an unwritten expiration date dependent on what bank they are issued under. So that means that the date you record on your business checks needs to be accurate. Be careful that the right day, month, and year is typed in and the payment will clear with no problem.

Putting Down the Business Bank Account Number

A business check has to list the corresponding business bank account number in order to be valid. If your company accidentally prints up a series of business checks that are off by even one account number, they will be unusable. Stop and look at your business bank statements so you have certainty that the right account number appears on your business checks.

Company Name and Corporate Address

Another problem that some payees have when trying to cash business checks is a discrepancy in name and address. If your business has undergone a name change or structuring, leaving off the LLC can lead the bank to not want to honor it. Issue checks that have your business name at the top just as it appears on your bank statements. Otherwise, vendors and employees will be calling you non-stop wanting to know why they can’t get paid. Additionally, the address that goes on your business checks has to be the one that you used when you opened your business bank account. Unless and until you tell your bank that you have changed your address, they have the right to refuse any check that doesn’t have completely valid information.

Conclusion

Businesses that print up business checks everyday need only make one mistake on a series of business checks to have them all return to them as unredeemed. Remember that business checks are often forged by scammers, so if banks aren’t diligent about catching them before they get cashed legitimate businesses can end up having their accounts wiped out. The way that banks work to protect their business clients is to scrutinize all checks that are written in their name. You might think that having your bank call to confirm each check that you write is overzealous, but what happens when one of those calls points out a fraudulent check before it can be redeemed?

Notate your business records to show when a new check has been issued as well as the date that it is mailed. Keep track of how long it takes to be cashed on average and it won’t take months to notice when a business check has gone missing. Being diligent about writing business checks accurately will help to keep your business accounts from being compromised and you won’t need to close out your business checking accounts and cancel all remaining outstanding checks.

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