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#1492337 - 01/10/11 03:49 PM Cashing Checks Payable to Bank
Compliance Lover Offline
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If a business wishes to get cash from their account, shouldn't they write the check to their employee/petty cash or something, not payable to the bank?

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#1492349 - 01/10/11 03:54 PM Re: Cashing Checks Payable to Bank Compliance Lover
John Burnett Offline
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John Burnett
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Most banks correctly instruct customers to make checks payable to the bank only if paying a sum due the bank (box rental, trust fees, etc.) Checks to be used to obtain cash for the business ought to be payable to the individual conducting the transaction, with an annotation to indicate the purpose of the check (petty cash, for example).
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#1492355 - 01/10/11 03:57 PM Re: Cashing Checks Payable to Bank Compliance Lover
Elwood P. Dowd Offline
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An accounting 201 textbook will say that a business replenishing petty cash should write the check payable to an employee. The more risky option is to make the check payable to "Cash" and the bank would require the employee to endorse it.

A check should be made payable to the bank when the bank is receiving the money. The cogent example from a few years ago was the firm that was issuing checks payable to the bank for payment on their line of credit. The employee used them to purchase official checks payable to a co-conspirator, showing the employer as the remitter. Bank was found liable.

Note that's one step beyond your fact situation. If your bank cashes a check payable to itself then the signature of the employee on the back is surplusage; i.e. it was not required by the law and may have little or no legal meaning.
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#1492375 - 01/10/11 04:20 PM Re: Cashing Checks Payable to Bank Elwood P. Dowd
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Thanks. We have the employee endorse the check showing they took cash, but who's to say the check wasn't intended for a loan payment or something else!

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