How banks work


The Check Clearance Process from a Business Perspective

Business checks are written everyday atchecks received in the office at the end of
almost every place of business. At age 18,the day are totaled together and deposited
anyone with the adequate amount of money caninto  the  bank  account.
open  a  checking  account of his or her own.
When the person responsible goes to the bank
One aspect of checking account functions thatand makes the deposit for the business, he or
many account owners are not familiar with theshe hands a large number of checks to the
processing of their checks after they havebank teller. The teller will then verify the
been written. When shopping, the customeramount of the deposit to the total amount of
many times thinks to his or herself whetherthe  checks.
he or she should pay cash, charge it, or pay
for the purchase with a check. He or she mayAfter the deposit has been verified and all
ponder this question in their mind all thenumbers are correct, the teller will then run
way  to  the  check  out  counter.the checks through the proof machine to be
verified again. The proof machine also
When the customer makes the decision to payencodes the amount on the bottom right hand
for the merchandise with a check, a longcorner of the check. When all of the work has
process is started. This process begins whenbeen ran through the proof machine it is then
the check is handed over to the cashier. Oncesorted by an automatic sorter that sorts the
all information has been properly placed onchecks  by  their  routing  numbers.
the check the cashier then will normally ask
for two things, a home phone number and aAfter the checks have been sorted they are
driver's  license  number.sent to the bank that they have been drawn
on. Once the checks arrive at the banks they
Once all of the necessary information hasare drawn on, they are then sorted by their
been placed on the check by both the cashieraccount numbers. As these checks are being
and the customer the check is scanned in thesorted they are posted to the account
automatic check reader. This check readerautomatically. The checks then, in account
recognizes the customers account number,number order are placed in a safe filing area
A.B.A. number (or routing number), as well asso they will not be lost until the bank
the  check  number.statements  are  sent  to the account owners.
The computer system can then recognize theThe check or a copy of the check is then sent
specific account and check to make sure thatto the account owner in the mail with his or
there are no returned checks on that account.her statement. In the case that a copy of the
Once the check is approved, it is thencheck is sent to the owner the check is kept
printed or endorsed on the back with allin a safe place until it can be properly
proper information for deposits, includingdestroyed.
the amount of the purchase, cash back
received (if applicable), store locationThis is only one example of the way a check
number, date, time, cashier number, and theis cleared through a certain business.
customer's  account  number.Although, the basic concept of check clearing
is the same, each individual company may go
The cashier then stores the check in a lockedthrough its own processing procedure before
box until it is time for them to go home. Alldepositing the check to the bank. Most banks
checks are then added together to make surehandle their business checks in approximately
none are missing and to make sure the cashierthe same manner.
put all checks in for the correct amount. All



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