This is a great question, and we’d love to get into this a bit more by diving deeper into check endorsements, so let’s get started.

First, What Is A Third-Party Check?

A third-party check is a personal or business check that is signed over as payment to another person. Essentially, if you are the payee (recipient) on a check, you make an endorsement to sign it over to someone else – now making that money belong to the new payee.

Endorsement in itself is a signature – and you can see this on the back of a check with a specific space to sign. It’s important to pay attention to these instructions because the bank has a designated “do not endorse/sign” spot for check-processing.

Types of check endorsements include:

• Endorsement in full: This includes the instructions “pay to the order of” with your (the payee) signature, signing the check over in full to the new payee.
• Blank endorsement: This includes your (the payee) signature but no other instructions.
• Restrictive endorsement: This includes the instructions “for deposit only” with your (the payee) signature, making this check only viable for deposits – and someone can’t cash it. If you also include a bank account number with this instruction, the check can only be deposited into that specific account. Also note that some banks require payees to endorse a check with "for mobile deposit only" to deposit a check remotely with a mobile banking app.

Business Check Endorsements Dos and Don’ts

Are Third-Party Check Endorsements A Good Idea?

Now that you understand how it works – it comes down to this: Even if you can sign over a check to someone else, should you?

While it may seem like it could save time to just sign a check over to someone else, you may be taking the longer route – with a lot more red tape. Due to (good) increasing banking and identification security regulations in the United States, many banks won’t accept a third-party check at the risk of fraud.

So, what’s the best way to get this money to someone else? Deposit the original check into your account, and then write a new check to your payee from your account. It’s clean, it’s clear-cut, and it’s trackable - especially if you use laser checks paired with an accounting program

More About Business Laser Checks

Most businesses these days rely on laser checks since these maximize investments into existing accounting software like QuickBooks and Peachtree®. Leveraging the power of software, these compatible computer (laser) checks automatically track spending maintain vendor details, and create easy-access records, all saving SBOs time and money. checksforless.com® ensures that our computer checks are 100% compatible with existing software, in addition to being customizable for the business brand with logos, colors, and fonts.

checksforless.com® has a 100% financial institution compatibility guarantee. Our state of the art MICR matching system also ensures readability by all financial institutions. We guarantee your checks will meet or exceed industry bank processing standards, including Check 21 regulations. What information should I have printed on my business checks? If you aren’t sure what a bank needs for compliant checks, don’t worry – it’s all taken care of. Through our online ordering system, we get everything we need to ensure your checks are exactly right.

What security features do you offer on your business checks and how can I be sure that CFL is a reputable and trustworthy online business checks supplier?

Circling back to maximized security (no third-party endorsements here), all checksforless.com® checks exceed the security guidelines set by the industry and by the Check Payments Systems Association. To safeguard your information against fraud, our site uses Secure SSL (Secure Sockets Layer) technology. Additionally, we use a secure server for all online transactions and have security checkpoints throughout in the ordering process. We further protect your personal and financial information through Enhanced Identity Lock Theft Protection (double verification) and 3rd party security validation, and we never share customer data with third parties. Lastly, checksforless.com® are members of the Better Business.

FYI – Business Laser Checks = Improved Tax Time

Third-party check endorsement can also make for a gray-area kind of tax-time, requiring you to have to remember what checks you signed over in the past year – something that is nearly impossible to do! When you use laser checks to issue your payments, all your records will be paired with your accounting software system, providing complete accurate records when you need it the most. And for even more tax-time tips, head to our guide here.

Maximizing Your Efficiency and Effectiveness With Laser Checks

If you are ready to order, visit us online at checksforless.com® or call us toll-free at 800-245-5775 to get started. While our FAQ page is a great place to check out more information, our teams of experts are always happy to help you with any more specific questions you have along the way. We are proud to offer a 100% satisfaction guarantee on all our checks, and we are also happy to beat any lower price you find by 10%. Our quick turnaround time is 3-5 days with production, not including shipping time. We look forward to helping you will all of your business and personal checking needs!

If you are ready to order your customized business checks that are built with safety and protect your business reputation, contact us today!

This article is made possible by Checksforless.com® For more than 35 years, Checksforless.com® has provided over 500,000 businesses with high quality business checks, deposit slips, and other banking supplies with easy ordering and fast production times; all at the guaranteed lowest price in the nation. Our discount business checks are easily customizable and compatible with over 4,500 software programs including QuickBooks and Peachtree/Sage 50. Email or call us toll-free at 800-245-5775.

https://money.usnews.com/banking/articles/endorsing-a-check-the-right-way-at-the-right-time