Paying staff and suppliers by cheque works well when it follows the same steps every month: build the payment list, get it approved, print the cheques and vouchers, hand them over against a signature, and reconcile once they clear. Most problems with cheque payments, such as duplicates, missing cheques and arguments about what was paid, come from skipping one of those steps.
This guide sets out a monthly routine you can adapt for a small office or a finance team. It covers the steps that do not change: who prepares, who approves, who signs, and how the record stays accurate afterwards.
Why businesses still pay by cheque
For many suppliers a cheque is simply the expected way to be paid. It carries a cheque number that both sides can quote, needs an authorised signature, and leaves a paper trail that a bank transfer reference often does not. Some vendors, particularly smaller ones, prefer a cheque they can deposit at their own bank on their own schedule.
General information, not tax or legal advice. Rules change; check with your accountant, bank or a qualified adviser for your situation.
India: the cash payment limit
For a long time Indian income-tax law has disallowed a business expense where payments to one person in a single day exceed ₹10,000 and are made in cash rather than by account payee cheque, account payee draft or an electronic bank transfer. This rule was Section 40A(3) of the Income-tax Act, 1961, with a higher limit for payments to goods transporters. It is one reason Indian businesses pay suppliers by account payee cheque instead of cash. The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and renumbered its sections, so ask your CA for the current provision and its exceptions before relying on a section number.
An account payee crossing matters here. It tells the bank to credit only the named payee's account, so the payment can be traced to a bank account. A bearer cheque handed over the counter does not give you that.
Gulf: salaries go through WPS, vendors by cheque
In the UAE, private-sector employers registered with the Ministry of Human Resources and Emiratisation (MOHRE) must pay wages through the Wage Protection System (WPS). That means transfers through banks, exchange houses or other institutions approved by the Central Bank. A new WPS resolution (Ministerial Resolution No. 340 of 2026) took effect on 1 June 2026, with a single wage due date and tighter enforcement. Saudi Arabia, Qatar, Oman, Kuwait and Bahrain run their own wage protection systems.
In practice, a Gulf business does not pay salaries by cheque. It uses cheques for suppliers, landlords, contractors and post-dated instalments. The workflow below works the same way for vendor runs. If you are in the Gulf, read "staff" as anything outside the WPS payroll, such as reimbursements or final settlements, where your adviser confirms a cheque is acceptable.
Step 1: prepare the payment list
Start from source documents, not memory. For suppliers that means approved invoices that are due. For staff it means the payroll sheet. Put together one list with these columns for each payment:
- Payee name, exactly as it should appear on the cheque. It must match the name on their bank account.
- Amount.
- Cheque date. Use today's date for immediate payments, or a future date for agreed post-dated instalments.
- Reference: the invoice number, payroll month or contract.
- Bank account to pay from, if you run more than one.
Check the list for duplicates before it goes anywhere. An invoice that appears twice, or was already paid last month, is far easier to catch here than after a cheque has been signed. Comparing the list against last month's cheque record by payee and amount takes a few minutes.
Step 2: approval before printing
Whoever prepares the list should not be the person who approves it. That separation is the main control in any payment process. It is also the first thing an auditor looks for.
- The approver reviews the list against the invoices or payroll and signs or initials it.
- Any change after approval, such as a corrected amount or an added payee, goes back for approval again.
- Large or unusual payments should get a second look, whatever your normal threshold is.
The authorised signatories on the bank account then sign the cheques. They may or may not be the same people as the approvers. Your bank mandate decides who can sign and whether two signatures are needed.
Step 3: print the cheques and vouchers
Printing removes the handwriting errors that cause most returned cheques: an amount in words that does not match the figures, an illegible payee, or a date in the wrong format.
Payees first
If your supplier or staff list already exists in a spreadsheet or your accounting package, export it to CSV and import it into ChequeMaster once, so payee names are not retyped every month. See importing and exporting payees by CSV. Only payees are imported this way. The amount and date for each cheque are entered in ChequeMaster when you print.
The cheque run
For a handful of cheques, print them one at a time. For a longer run, ChequeMaster's bulk printing (currently a beta feature) lets you enter the payee, amount and date for each cheque in the run, then print the whole batch in one pass in cheque-number order. Load the leaves in the same order as the book, and do a dry run on plain paper first. The details are in how to print cheques in bulk.
Every printed cheque is recorded against its cheque number. A misprint can be edited and reprinted on its own without redoing the run.
Vouchers
Print a voucher for each payment on A4. It should include a description that names the invoice or payroll month, plus signature blocks for Prepared By, Approved By and Received By. The first two are signed in the office before release. The third is signed by the person who collects the cheque. See how to print cheque vouchers. Vouchers are part of the paid licence, not the free edition.
Step 4: hand over against acknowledgement
A signed cheque is close to cash. Treat release as its own step:
- Keep signed cheques locked away until they are collected or dispatched.
- Hand each cheque over with its voucher. The recipient signs Received By and writes the date.
- If a supplier's representative collects, check their authority, such as a company letter or ID, the first time.
- For couriered cheques, record the tracking reference against the cheque number.
- File the signed vouchers in cheque-number order.
The signed voucher settles any later argument about whether a cheque was received. When a supplier says "we never got it", you have a signature and a date.
Step 5: record, track and reconcile
Once a cheque leaves the office it shows as Issued until the bank pays it. Keeping that status accurate is what makes the rest of the process useful.
- Keep a cheque issue register. Record every cheque number, including cancelled and spoiled leaves. See how to keep a cheque issue register.
- Update statuses from the bank statement. Mark cheques Cleared as they appear. Mark Returned, Cancelled or Stopped Payment as those happen. See tracking cleared and uncleared cheques.
- Reconcile at month end. In ChequeMaster, filter the cheque report by date and status and export it to Excel. Then match it against the bank statement yourself. The software does not reconcile automatically. The method is in bank reconciliation for cheques.
- Chase old uncleared cheques. A salary or vendor cheque still unpresented after several weeks often means the payee never received it. Call before it goes stale.
A monthly checklist
| When | Task | Who |
|---|---|---|
| Before the run | Build payment list from invoices or payroll; check for duplicates | Preparer |
| Before the run | Review and approve list | Approver |
| Run day | Test print on plain paper, print cheques and vouchers | Preparer |
| Run day | Sign cheques; sign Prepared/Approved on vouchers | Signatories, approver |
| Handover | Release against Received By signature; file vouchers | Accounts |
| Month end | Update statuses, export report, reconcile with statement | Accounts |
In a very small business one person may do several of these jobs. Even then, have someone else approve the list. Two people involved is much safer than one.
Common mistakes
- Payee names that do not match the bank account. Use the legal name from the supplier's invoice or bank details, not a trading nickname.
- Bearer cheques for convenience. Cross them account payee unless there is a specific reason not to.
- Leaves out of order in the printer. The record then disagrees with the paper. Check the first leaf's number before every run.
- Not tracking post-dated cheques. Forward-dated vendor cheques are commitments. Filter for future-dated cheques still marked Issued so you know what will be presented and when.
