How to endorse a business check

Business checks are a widely accepted and commonly used payment method. While requirements can vary by bank, you typically have to endorse the check—by signing the back—before it can be deposited. Endorsing a business check adds a layer of security because the bank typically requires an authorized representative’s signature to cash it. This allows the bank to verify the business’s authorized representative’s identity, ensuring funds are distributed correctly.

Read on to learn how to endorse a check for your business.

What you’ll learn:

• To endorse a business check, verify that all information is correct, write the business’s name on the back of the check in the Endorse here area and sign your name and title under it.

• Business checks typically require an authorized user to endorse them on behalf of the company, whereas personal checks usually only require the payee to endorse them.

• There are several types of business check endorsements you can use, and the best option for your business depends on how you’d like the funds deposited or distributed.

To endorse a business check, there are some general steps to follow before you can deposit it into your business bank account.

Before signing the check on behalf of the business, confirm that all information is accurate and current. Pay attention to:

• The check amount: Make sure the numeric amount matches the written amount and that it’s spelled correctly.

• The date: Ensure the day, month and year are accurate.

• The business’s name: Look over the spelling of the business’s name to verify everything is correct. Make sure the full legal business name is used—without abbreviations—since the endorsement on the back of the check should match how it appears on the front.

If the check is made out to your company, it should be endorsed by an authorized representative acting on the company’s behalf.

The back of the check usually includes a section at the top labeled Endorse here. Three lines comprise this section and they’re reserved for your endorsement. Below these three lines, there’s generally another section that says Do not write, stamp, or sign below this line.

To correctly fill in the endorsement section:

• Write the business’s name exactly as it appears on the Pay to the order of line on the front of the check. 

• Sign your name on the second line. 

• Write your title in print on the third line.

The type of business check endorsement will depend on what you want to do with the funds.

This type of endorsement allows you to name someone else as the payee—the person or party the check is made out to—on your business’s check. To use a special endorsement, turn the check over and write Pay to the order of [NAME]. You then sign your name underneath. 

This method isn’t typically recommended in most cases because you’ll likely be required to accompany the payee when depositing the check. This way, the bank can know the transaction is legitimate.

Depending on your financial institution, you may be able to deposit your check directly into your account through your bank’s mobile app. The exact process varies from bank to bank, but you typically sign the back of the check and note that it’s a mobile deposit.

There are different ways to ensure a business check is accepted by the mobile app. For example, some checks may include a box labeled Mobile deposit that you can check to indicate it’s being deposited electronically. Or you can write For mobile deposit in the endorsement section of the check.

Sometimes referred to as for deposit only, this is typically the most secure endorsement method. To use a restrictive endorsement: 

1. Write For deposit only on the first endorsement line.

2. Write your account number on the next line.

3. Sign your name on the last line. 

This business check endorsement method is considered the most secure option because it provides a precise designation for the funds by specifying the account where you want the check deposited. This means the check can’t be fraudulently cashed since you’ve limited where the funds can go.

If a check is made payable to your business but the funds are meant to be used by another person, you can use a FBO endorsement. For this type of endorsement, the check is written out to the business and then signed FBO of John Doe. This allows the business to deposit the check while directing the funds to the intended purpose/recipient.

Exact policies vary by bank, but to cash the check, both parties might be required to sign it. If not, only the business to which the check is made payable is required to endorse it.

Blank endorsements happen when you sign the back of a check made out to your business—without adding any instructions or restrictions. While this is a common endorsement method, it’s less secure than other types because you’re not providing a destination for the funds. 

For this reason, it’s typically best to wait to endorse the check until right before you plan on depositing it. That’s why blank endorsements are most commonly used at an ATM or via mobile deposit.

While business and personal checks function similarly, they have differences. These include:

• Who they’re made out to: Business checks are typically made out to a business rather than an individual. 

• Who can endorse them: Business checks usually require an authorized representative to endorse the check. You may also need to list your title in the endorsement area of the check before it can be deposited. Personal checks only require the payee.

Endorsing a business check authorizes your bank to deposit funds into your account. If you’re considering different business bank accounts, you might look at a small-business checking account from Capital One. Capital One business checking products can handle everything, from basic checking to complex transactions designed to meet your company’s needs.