Can I Endorse Over a Business Check to My Personal Account?

If you run a small business, you'll likely receive checks from clients that you'll need to deposit or cash. While having a business checking account is good practice for keeping personal and business finances separate, you might not have one yet, especially if you're a sole proprietor. Your bank may let you use your personal bank account if the check is in your name rather than the business name. However, you'll likely need to have a business account in your business's name in other situations.

Before endorsing the business check, you'll need to consider your options, depending on how the check is written out and the type of business you have.

First, take a look at the name on the payee line since that's generally the name you'll use to endorse the check and the name that should be on the bank account. If it's your company name and not your name, expect some issues trying to endorse and cash such a check with your personal account. Nearside notes that one exception is if you're a sole proprietor with a "doing business as" (DBA) name on file with your bank and the state and the bank agrees.

Experian mentions having authority from the business is important too. Therefore, if you're not running a sole proprietorship where you're the sole business owner, you'll need to be on file with the bank as a company representative authorized to endorse checks.

Once you've verified you have the authority to endorse the specific business check, you can proceed with doing so.

If the business check has your legal name as the payee rather than your business name, you should be able to simply sign your name on the back of the check like you would for any check. Otherwise, Huntington explains the endorsement area will need to have your business's name (matching the check's payee name), your legal name and your job title.

Say that the check is written out to John Doe Consulting and you're the owner named John Doe. This means you'd endorse the check with "John Doe Consulting" and then "John Doe, Owner."

You may consider restricting the endorsement on your business check to improve security. According to the Consumer Financial Protection Bureau, you'll often do this to mark the business check as "for deposit only" so that it can only be deposited and thus not cashed by someone who may steal it. You can also specify the account number for the account for the deposit.

In other cases, restricting the endorsement may be a requirement your financial institution sets. For example, if you want to deposit checks via mobile deposit, Bank of America says you'd have to use the restrictive endorsement "for deposit only" possibly followed by your bank's name.

Experian cautions that banks and credit unions may feel reluctant to cash business checks versus deposit them. Therefore, you'll want to reach out to the financial institution first to confirm this as well as address any concerns about whether you can use a personal checking account versus a business bank account. You can then consider these methods for the properly endorsed business check:

• ‌Cash the check‌ ‌in person‌: With your photo ID and any required business documentation, head to a branch. You'll fill out a deposit slip if required. Specify you want cash back for the business check and sign the signature line for cash received, instructs the First National Bank of Omaha. The bank teller will verify the check and verify your authorization.
  
• ‌Deposit the‌ ‌business check‌ ‌via ATM‌: Take your personal or business debit card to a bank ATM and follow the machine's steps to access your bank account and make a deposit. You may put the check in a deposit envelope or feed it directly into the machine, notes Capital One. You could then withdraw money if needed.
• ‌Deposit the‌ ‌business check‌ ‌via mobile‌ ‌check deposit‌: You could simply log in to your bank's mobile app, find the deposit option, enter check information, snap check images and confirm. This is best if you don't need the cash in hand now.

If you don't have luck with your bank or you don't want to open a business account, you could consider alternatives like check-cashing stores that may cash the business check. They'd require proper identification that you're the authorized business representative and usually set limits for the check amount they'll cash.

Using your personal account to cash business checks can be convenient since you won't need to set up or manage another account that can come with fees. Plus, if your business is just a sole proprietorship and not formally registered with the state, using a personal account may seem more appealing than needing to register and produce the business documentation banks often require for opening a separate business account.

However, the Small Business Administration cautions there are downsides to mixing business and personal funds in one account. Along with facing possible issues cashing checks, you'll find it harder to track your business finances, and this can especially hurt when tax time comes. Having a business account also helps with demonstrating professionalism and limiting your liability.