In today’s world, virtually everyone possesses a bank account, which typically includes a cheque book. However, many individuals lack a clear understanding of how to utilize their cheque books effectively, leading to unintentional errors.
When issuing a cheque, it is essential to write the recipient’s name clearly. Cheques can also be made out to a company or organization in addition to an individual. Common mistakes in cheque writing can be easily avoided, and we will highlight these errors to help you prevent significant issues. One critical point is to write ‘only’ at the end of the amount in words.
For instance, if you write ‘Five lakhs’, it should be ‘Five lakhs only’. Additionally, ensure that you place a slanting line (/) at the end of the numerical amount, such as 500000/. This practice helps mitigate the risk of cheque fraud. Failing to do so may allow someone to alter the amount.
A frequent cause of cheque bouncing is an incorrect signature. Always sign the cheque with the same signature that you have on file with your bank. A mismatch may lead to the cheque being declined.
Moreover, writing an incorrect date can result in the bank refusing to process the cheque. Ensure that the date is accurate and clearly written. Avoid post-dating cheques unless absolutely necessary, and only issue them when you are certain of the date you want the funds to be withdrawn. Lastly, always verify that you have sufficient funds in your account before issuing a cheque, as a bounced cheque can lead to penalties and potential legal consequences.
