Check cashing by authorized signer?

flowergal-2010September 20, 2013

Can an authorized signer on a business account cash a check made payable to business owner? (The business is a sole proprietor). If so, how can another authorized signer find out check amounts, dates, etc.?

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barbcollins

Hmmm. sounds like you are suspicious of someone.

Are you saying a check made payable to the Business Owner from somebody else? If so, that's going to be tough. I would think you would need the cooperation of the person writing the check.

    Bookmark   September 20, 2013 at 9:38PM
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barbcollins

Deleting duplicate

This post was edited by barbcollins on Sun, Sep 22, 13 at 6:29

    Bookmark   September 20, 2013 at 9:41PM
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kirkhall

It sounds like you are asking, if I own a business and am a signer, can I write myself a check and cash it? Answer--Yes.

How does another signer find out? You have to look at the account information--either from the bank or quickbooks/accounting program (or, probably both).

    Bookmark   September 20, 2013 at 10:42PM
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hilltop_gw

This is a question you should ask your bank.
I'm not sure I fully understand your question. And I'm not a banker. This is just my understanding....

Let's say "Pam" owns the business and "Jane" is an authorized signer. Both are obligated to act in the best interest of the business. Jane should only be able to sign checks to pay bills. I would not think that Jane could cash a check. I doubt if a bank would let her cash a small check for petty cash, but if so, her name should be on the back side when endorsing since she's the one receiving the cash. Furthermore, that should show up on a bank statement. But it would be the responsibility of whoever reconciles the bank statements or has access to online banking and whoever monitors petty cash to determine where the cash actually ended up at. If Jane is doing it all, then there may be a problem. A small business owner needs a lot of trust
and to do their due diligence in making sure funds are being handled properly. There needs to be checks and balances in place to avoid improper behavior.

If a customer gave the business a check and Jane cashed it for her own personal use or deposited it in her own (non-business) account, then that would be a conversion and fraud.

Here's one explanation of authorized signer rights:
http://www.bankersonline.com/operations/guru2011/gurus_op080811f.html

Otherwise, here's a long list of Q&A's on banking:

Here is a link that might be useful: http://www.bankingquestions.com/businessaccounts/businessaccounts.html#cash

    Bookmark   September 22, 2013 at 12:14AM
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