How to Write a Cheque

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Cheques

This section about cheques contains the following:

1.       Guidelines for writing cheques

2.     A sample completed cheque

3.     Guidelines for receiving cheques.

Guidelines for Writing Cheques.

When preparing a cheque make sure you follow these guidelines:

• Date the cheque

• Write out the cheque amount in both words and figures

• Do not leave gaps in the words or the figures which then enables another person to change the amount

• The words “NOT NEGOTIABLE” should be stamped or printed on the cheque. This means the cheque must be deposited into the account of the payee (the person who the cheque is made out to). The diagonal lines should not cross the cheque number at the bottom of the cheque.

• It is common practice for a business cheque to be signed by 2 people called SIGNATORIES. This is a precautionary measure – a way of ensuring cheques are being used correctly in the business.

• All relevant documents should be attached to the cheque. If the cheque is paying for the supply of materials then the invoice or remittance slip should be attached.

• If you make a mistake on the cheque get 2 signatories to initial the correction.

• However if you make a major error you may need to cancel the cheque. You will need to write “CANCELLED” across the cheque then pass it on to the appropriate person.

• Keep the cheque book in a secure place.

• The only time you would write a cheque for “cash” is for petty cash or wages.

Example Below

Guidelines for receiving cheques.

When the business receives a cheque you must ensure that is valid by checking the following:

• the date of the cheque – it cannot be over 12 months old or be dated ahead of its time (post-dated)

• The amount in words and figures are the same
• The payee is spelt correctly
• The cheque is signed by the drawer

There may be other steps to take in accordance with your business’s policy and procedures:

• The name and address of the drawer is written on the back of the cheque
• Any alterations are initialed correctly
• Checking that the amount on the cheque is the correct amount – by comparing with the remittance slip.
• Reporting any discrepancies or problems with your supervisor.