You can pay for goods and services that were rendered to you through either cheque or cash payments which depends on the one you are comfortable with or how you can easily access funds or money. In this article, we are going to discuss how to make a payment with a cheque and the steps involved. If you are making a payment with a cheque, the cheque issuer will fill out the necessary details that need to fill out on the cheque leaf he wants to use.
Some of the details that will be filled in include the payee’s name, the amount to be paid should be written in both figures and in words, the date the payment should be made to the beneficiary, and the signature of the account holder who is the cheque issuer. When the payee receives the cheque, he or she will present or deposit it in the bank for processing to start.
Cheque payments take longer time when compared to cash payments. When you pay with a cheque, it is instant and the payee receives the funds immediately, but when it is a cheque, it has a process which must be followed and this is what makes it take longer time. This process starts when the cheque has been presented to the bank. If the payee doesn’t present the cheque and keeps it at home, the process will not start. After the cheque has been presented, it goes through a verification process before the funds will be transferred to the beneficiaries’ or payees’ accounts.
Cheque Payment
It is a common practice for people to use cheques to make payments for different purposes like payment of bills, transferring money to some organisations or individuals, making purchases etc. In situations where electronic payment methods may not be available, cheque payment becomes convenient and also the widely accepted method of payment.
What Is Cheque Payment?
A cheque payment can be described as one of the methods of making payments with a cheque. The account holder issues a cheque to a beneficiary/payee by filling in the payee’s name, date, and amount to b paid in words and in figures. The payee might be an individual or an organisation. The cheque serves as the authority given to the bank by the issuer to pay the amount written on the cheque to the payee or the beneficiary.
How To Make A Payment With A Cheque
Making a payment with a cheque is not a difficult task. The right guidelines or steps to make the payments with a cheque must be taken for the process to be smooth and successful. The following are the steps to make payments with a cheque.
Obtain A Cheque Book
One of the first steps you must take if you are looking for how to make a payment with a cheque is to apply and get a chequebook from your bank. Obtaining a chequebook will be possible if you are operating a cheque-issuing account in the bank. So when you open such a bank account that allows you to use it with a cheque, you will be automatically issued a chequebook by the bank.
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Fill In The Date Column
This is where you need to write the date you want the bank to make the funds available to the payee from your account. The date can be the present day’s date or a future date. The date column is always at the top right corner of the cheque leaf. Ensure that you use the correct date format in the space provided.
Fill In The Beneficiary /Payee Information
Filling in the beneficiaries information is one of the most important steps how to make a payment with a cheque you must follow. On the cheque leaf, you will see an instruction that says ” Pay to the order of”. This is the space that has been provided for you to write the name of the individual or organisation that you are giving the bank instruction to pay. Ensure that you fill in the names correctly because if there is any mistake on the name, the bank will not honour the cheque, the money will not be paid to the payee and in most cases, the cheque will be returned to you the issuer.
Fill In The Amount To Be Paid In Figures
On the line where you have the currency symbol, enter the amount to be paid in figures. For instance, if you want to pay $1,000, you should write it in this format “1,000” without the symbol because the bank has written the symbol.
Write The Amount To Be Paid In Words
There is a line below the Payee’s name on the cheque leaf. This is provided so that the account holder/issuer of the cheque will fill in the amount to be paid to the beneficiary in words. Ensure the words are boldly, correctly and clearly written.
Ensure You Sign The Cheque
This is one of the important steps you must follow if you are looking for how to make a payment with a cheque. It is your signature that validates the cheque you are issuing. Without the account holder’s signature authorising the bank to pay, the cheque issued will be returned to the account holder. Ensure that the signature you are signing is the same as what is on your mandate card or when you filled out the account opening form with the bank.
Verify The Details You Filled in On The Cheque
After you have filled in all the necessary information as required on the cheque leaf, the next step to take on how to make a payment with a cheque is to cross-check all the information you filled Make sure there is no error on the information filled out or mutilations on the cheque that can make the cheque to be rejected by the bank.
Submit The Cheque
After filling in the necessary information as required, and cross-checking it to be correct, the next step on how to make a payment with a cheque you should take is to submit the cheque to either the bank or to the payee for processing and payment. You can decide to send it to the payee via mail or hand it over to the payee if he is physically present with you.
Record The Check On Your Check Register
It is a very important practice to have a register where you can record all the cheques issued and received in your bank account. This is the next step on how to make a payment with a cheque you need to follow. On the cheque register, record the name of the payee, the date the cheque was issued, and the amount written on the cheque. This helps to track your cheques and for future reference purposes.