K. Srinivas CWA
A bank cheque is a written order directing your bank to pay a certain sum of money against your bank balance. Almost every one of us use cheques extensively to make payments for utility bills, insurance payments etc; Writing a cheque may sound simple to many of us but believe me, writing a cheque correctly is tough.
Most of us often make inadvertent errors which may even make a cheque invalid. The following is a step-by-step process that can be followed to minimize the chances of any mistakes appearing in your cheque.
Step 1:
Start writing a cheque by entering the date of the cheque.
Enter a future date if you want the payee (the one to whom you make the payment) to realize the amount in the future.
You can enter other date if you want the payee to realize the cheque amount immediately. However, Please be reminded that a bank cheque in India is valid only for 3 months from the date mentioned in the cheque.
Step 2:
On the space provided after the word “PAY” enter the name of payee (the person or the Company to whom you want the payment to be made).
Select “BEARER” only if you want the payee to encash the cheque immediately on presenting the cheque to the bank. If you don’t want to use the “BEARER” option, strike off the word.
Step 3:
In the space provided near “RUPEES”, write the amount to be mentioned in the cheque in words. It is advisable to check your bank balance first before writing the amount. This will help you avoid writing a cheque for an amount which far exceeds your bank balance.
It is a good practice to avoid leaving any empty space in this space. Draw a straight line immediately after the end of the sentence in the space provided for writing the amount in words.
Step 4:
Now write the amount in numbers in the box provided in the cheque for this purpose. At the end of the amount, draw a “ /-“ sign to avoid any possible tampering.
Pasting a cello tape over the amount in this space also helps avoid any possible tampering.
Step 5:
A Payee can either encash a cheque or get the cheque amount credited in his bank account. If you want the payment to be made only to the payee’s account, then draw two simple parallel lines on the top left of the cheque.
In between those parallel lines write “ A/C PAYEE ONLY”. This is an instruction to your banker to credit the amount in the cheque to payee’s bank a/c and not to make cash to the payee over the counter.
Step 6:
Last but not the least; put your signature on the bottom of the right of the cheque. As far as possible, try to put your signature in the same way as you did while opening your bank account. Though banks allow any change or variations in the signature due to health reasons or old age, it is advisable to put your signature right the first time to avoid any disputes in the future.
By following the best practices of writing a cheque as given above, you can ensure that your cheques are correctly written and minimize the chances of your cheques getting rejected due to simple oversight errors.
The author, CWA K. Srinivas, is a Finance and Tax Consultant based on Chennai and can be reached at A 1/ 5, Cannan Apartments,Krishna Road,New Perungalathur, Chennai – 63, Mobile: 99403 75173.
Author Bio
One more very important thing. First, before starting to fill the cheque, it is necessary to fill the cheque details at the end of the cheque book, Cheque No. Cheque Date, Payee’s Name and Amount. Because once, we fill the cheque book, in hurry we would handover the cheque to the payee without keeping information of the payment ourselves. This would not help to know the cheque details for future reference. If the cheque is not presented for a long time, we may not be having a check over the bank account. In India, 15 to 20 years back, all the banks were providing the counterfoils in the cheque leaves. In those days, the chances for omission were very less. But, now the bankers have ceased providing the counterfoils. Instead they are providing the two to three sheets for noting the cheque issue details. Actually, this should be the first step, for filling the cheques.
Hi, The instructions would be very useful. I belive that previously the cheque had the validity for 6 months in India. Has, it been changed ?
Also, some people would be using the space where the cheque number and bank code number is printed. I had forgotten the name for that space, at the bottom of the cheque. We are not supposed to use that space. Can any one, please let me know the name of that space?
Another very precaution is NOT to leave any blank space in between while writing the amount in figures after the printed word ‘Rs.’ For example write as : “Rs.1000/- ” and NOT like “Rs. 1000/-” , to avoid fraudulent alteration in the amount by adding a digit in the empty space after ‘Rs.’
I am told that there are instructions that the correct way of writing the amount in figures would be that the paise and full rupee amounts should be separated by a full-stop (dot) and not by any other sign such as a dash or a slash. For example, 55.25 is the correct way to write in figures the amount fifty five rupees and twenty five paise; writing 55-25 or 55/25 is considered to be wrong and that the bank may be justified in returning unpaid a cheque written otherwise than as 55.25.
(In the USA, however, the practice is different, as the cents amount is written on a cheque as a fraction, with the denominator being 100 and the numerator being the number of cents.)
It will be better if you show pictures of wrongly written cheques with common mistakes in red fonts and few rightly written cheques, with green fonts. Pictorial representation gives a better impact.
I believe, One more needs to be followed:
Write cheque particulars in the counterfoil for future accounting purpose and in order to khow at a latter date as to whom cheque had been issued.