Check Stub
A check stub, also known as a check voucher or remittance advice, is a document that accompanies a check, providing additional information about the payment. It is usually attached to the check and separated by a perforated line, allowing the payee to keep it as a record of the transaction while depositing or cashing the check. Check stubs are commonly used by businesses and organizations when paying employees, vendors, or other parties, as they offer a convenient way to communicate important payment details.
A check stub typically includes the following information:
- Payee’s name: The name of the person or entity receiving the payment.
- Date: The date the check was issued.
- Check number: The unique number assigned to the check, which helps track and manage financial transactions.
- Payment amount: The amount of the payment, matching the amount written on the check.
- Description or memo: A brief description of the purpose of the payment, such as an invoice number, a billing period, or a notation for services rendered.
- Deductions or adjustments: If applicable, any deductions or adjustments made to the payment, such as taxes, insurance, or other fees.
- Net payment: The final payment amount after accounting for any deductions or adjustments.
By providing a check stub, the payer can ensure that the payee has a clear understanding of the payment details and any deductions or adjustments made. It also helps both parties maintain accurate records of their financial transactions and can be used as supporting documentation for accounting, tax, and audit purposes.
Example of a Check Stub
Let’s say a company named “Best Widgets Inc.” is paying one of its suppliers, “Quality Components LLC,” for an order of materials. The company will issue a check accompanied by a check stub to provide additional details about the payment. Here’s an example of what the check stub might include:
- Payee’s name: Quality Components LLC
- Date: May 15, 2023
- Check number: 1234
- Payment amount: $5,000.00
- Description or memo: Invoice #9876, Materials Order
- Deductions or adjustments (if applicable):
- Early payment discount: $100.00
- Net payment: $4,900.00
In this example, Best Widgets Inc. is paying Quality Components LLC $5,000 for materials, as specified in Invoice #9876. However, there is an early payment discount of $100 for paying the invoice within a certain period, so the final net payment is $4,900.
When Quality Components LLC receives the check and check stub, they can easily understand the details of the payment, including the invoice being paid, the early payment discount applied, and the final net payment amount. This information helps both parties maintain accurate financial records and ensures clear communication about the transaction.
