How to write a business check in 5 steps

 

Wondering about the best way to handle payments in your business? You’ve got a few options. You can use cash or a business credit card. But often, writing a check can be your best bet.

Why? Trackability. As you grow your business, keeping track of all the money coming in and out of your accounts becomes crucial. Business checks can help you do that. Every time you log a check when you write it, you’re building an accurate snapshot of your company’s finances, which means that you’ll be able to avoid unwelcome budgetary surprises.

There are other benefits to using business checks, too. For one thing, they’re more secure than cash. For another, they look professional and can help demonstrate your credibility. After all, you can’t write business checks without opening a business checking account and working with a banker to vet your finances.

 

Anatomy of a business check

It’s a good idea to familiarize yourself with the different parts of a business check before filling one out.

• Payee: The name of the recipient of the business check (this field also might say “pay to the order of”)

• Payment amount of the check in numbers: No surprises here — this is the dollar amount of your check, written out in numbers (e.g., $37)

• Payment amount of the check in words: Another place to write out the dollar amount, this time in words (e.g., thirty-seven dollars)

• Date: The date (including the month, day and year) that you want the check to be good; if you don’t care when the payee cashes the check, you can also just use the current date

• Memo line: Think of this as the subject line of your check — it’s a place to briefly describe the purpose of the payment (e.g., “new computers”), and it’s generally located in the bottom-left corner

• Signature line: Your signature to authorize the check, generally located in the bottom-right corner

• Routing number: The nine-digit number that identifies your financial institution

• Account number: The number on your business bank account

• Check number: The unique ID number on the business check, generally located in the upper-right corner

How to write a business check

If you’ve ever written a personal check, you’ll already know the ropes:

1. Step 1: Find out who you need to pay. If you’re sending the check to another business, make sure that you’re writing the check to the right company. If you’re sending it to an individual, check that you’re using their legal name and that you’ve spelled it correctly.

2. Step 2: Fill out the rest of the details of the check. You can always write out the check longhand. But if your business uses accounting software, you could fill in the details on a computer and print them out on a blank check.

3. Payroll checks can be tricker to fill out because they often include tax withholdings. If you’d prefer not to handle those withholdings on your own, you can hire an outside company or expert.

4. Step 3: Double-check the info for errors. If you identify any mistakes, you’ll need to void the check and start over.

5. Step 4: Sign the check. Once all the information has been filled in, and you’ve reviewed it to ensure that it’s correct, you’re ready to sign. The signature must match the account signature card that you gave to the bank. If your business also chooses to require two signatures, you must get both before sending out the check.

6. Step 5: Record the check. Jot down the details in your check register or in your accounting software right away so that you don’t lose track of how much money you’ve paid and need to clear. If you’ve just written a payroll check, you should also record the gross payment amount, net payment amount and applicable withholdings so that you have that info handy at tax time.

 

Can you write a check to yourself from your business?

Yes! Writing a check to yourself from your business is the same as writing a check to another recipient. On the payee line, you’ll just write your own name instead of the name of another vendor. The payment will still originate from your business checking account, even if it is written out personally to you as the business owner.

 

Final thoughts

Now that you know how to write a business check correctly, you’re ready to take your business to the next level. Reach out to a Chase business banker for more information about what else you can do to set yourself up for success.