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Top Ten Tips for Writing and Receiving Cheques - Cheque Rule Changes
 Most
small businesses deal with cheques on a
regular basis; whether paying or receiving
them, they are an important part of business
life. Cheques however, are commonly involved
in fraud cases, and are riskier than some
other forms of payment. There are also new
changes that mean some cheques of your
cheques could be returned unpaid.
Since October 1st, any cheques
payable to a bank or building society that
are made out only to the bank or
building society are likely to be declined.
This means that you need to put the details
(Name or account number) of who your cheque
is for. For Example: Instead of “ABC Bank
Limited”, you may need to put “ABC Bank
Limited – John Smith” or “ABC Bank Limited –
Account 123456789”.
This small change is designed to prevent
fraud on cheques paid to financial
institutions; but should only affect a small
number of your cheques.
To help protect your business from cheque
fraud and other risks, the UK payment
association APACS has come up with 10 top
tips for writing and receiving cheques:
Receiving a Cheque
1. Never accept a cheque, or banker's draft,
from someone unless you absolutely know and
trust them. Be especially wary when
accepting a high-value cheque or banker's
draft.
2. Be aware that a banker's draft is not
necessarily safe from fraud. If you receive
a banker's draft in payment for goods you
must allow time for the draft to clear
before releasing the goods. Banker's drafts
can be stolen or altered like any other
cheque and if it is altered, stolen or
counterfeit it will not be honoured.
3. Be aware that, even after the value of
the cheque or banker's draft has been
credited to your account, there is a risk
that the money could be reclaimed if the
cheque or banker's draft subsequently turns
out to be stolen or counterfeit.
4. Always consider other types of payment
for high-value items - such as a automated
phone or internet payment (takes three
working days) or a CHAPS payment (a same-day
service). There is a charge for a CHAPS
payment but it is a guaranteed, irrevocable,
same-day value payment. If the buyer is
unwilling to pay the relatively small cost
involved - or to split it with you - then
you need to be on your guard.
5. Cheques should be paid into your account
as soon as possible to reduce the risk of
loss or theft and should always be paid in
within six months as older ones may be
returned unpaid.
Writing a Cheque
6. If you are making a cheque payable to a
bank or a building society, do not make the
cheque payable simply to that organisation.
Add further details in the payee line, for
example XYZ Bank, re J Jones, account number
xxxxxx. (The rules for accepting cheques at
banks and building societies are changing
from October 2006, in order to safeguard
against fraud. After this date, if you try
to deposit a cheque in a branch, or by post,
made simply to a bank or building society,
it may be returned.)
7. You should draw a line through unused
spaces so unauthorised people cannot add
extra numbers or names.
8. If it is necessary to make amendments,
these should be made clear by crossing
through the error and initialling or signing
the correction.
9. Never pre-sign blank cheques. When
writing cheques, be sure to complete all
sections, including the payee name, and the
amount in both words and figures. To help
prevent fraudulent alteration it is good
practice to leave as little blank space as
possible. It is also good practice to
include the word 'only' after writing the
amount in words.
10. Always be sure to date cheques - undated
cheques are likely to be returned with a
request to include a date.
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