When a check cleared for a different amount than you wrote, pull the paid check image first. If the image shows your amount, the bank encoded it wrongly and you ask for a correction. If it shows the cleared amount in your handwriting, your ledger is wrong. If the amount looks changed, report an altered check.
Why would a check clear for a different amount than written?
A check clears for a different amount for one of four reasons: the ledger was keyed wrong, the bank encoded the amount wrongly, the check's words and figures disagree, or someone altered the check after you signed it. The first is the most common. The last is the most serious.
A ledger keying error. You wrote $418.00 on the check and typed $481.00 in the books. The check cleared correctly. This is the usual answer, and swapped digits like these leave a gap divisible by 9.
A bank encoding error. When a check is deposited, a bank prints the amount in magnetic ink along the bottom edge so machines can read it. If that encoded figure is wrong, the check is paid for the encoded figure, not the written one. A $1,200.00 check encoded as $12,000.00 is the dramatic version. A dropped or extra digit in the cents is the quiet one.
Words and figures that disagree. If the amount in words says "four hundred eighteen" and the box says 481.00, the bank had to pick one. UCC section 3-114 at Cornell's Legal Information Institute states that words prevail over numbers when an instrument's terms conflict.
An alteration. Someone changed the amount, usually upward, after the check left your hands. Washed checks, where the ink is removed and the amount rewritten, fall here.
Whatever the cause, the reconciliation shows a matched check with an amount difference. The broader family of reconciliation mistakes, and the quick test for each, is laid out in the main types of bank reconciliation errors.
Comparing the paid check image with the cleared amount
The paid check image is the bank's picture of the front and back of the check as it was presented. It is the one document that shows what the check said when the bank paid it. Download it from online banking or request it, and compare four things: the written words, the numeric box, the encoded line and your register.
Look at the image for:
- The amount in words. This is the legal amount when the box disagrees.
- The numeric box. Compare it with the words and with your register.
- The encoded amount along the bottom right, if the image shows it, which is what the bank's machines actually read.
- Signs of tampering. Different ink, uneven spacing, digits squeezed in front of the original amount, smudging around the payee or amount, or a payee name that does not match the vendor.
- The back. Who endorsed it and where it was deposited.
The decision table below sets out what the image tells you. Amounts are examples.
| What the image shows | Likely cause | Ledger entry | Bank action |
|---|---|---|---|
| Written $418.00; ledger $481.00; cleared $418.00 | Ledger keying error | Correct the ledger to $418.00 | None |
| Written $418.00; cleared $481.00; no sign of tampering | Encoding error | None until the bank corrects; show on bank side | Report the error in writing, ask for adjustment |
| Words "four hundred eighteen", figures $481.00; cleared $418.00 | Words and figures disagree | Correct the ledger to $418.00 | None, unless the vendor disputes |
| Amount visibly rewritten; cleared $4,180.00 | Alteration | None for the excess; show on bank side | Report as unauthorized alteration at once |
The entry to book for a check amount difference
The entry to book depends on which figure is right, and the right figure is what you owe the payee and what you authorised, not the figure the bank happened to pay. Correct your books only when your books are wrong. When the bank paid the wrong amount, the difference is a bank-side reconciling item until the bank fixes it.
For a keying error, adjust the original check entry to the written amount. If the month is open, edit the entry. If it is closed, book a correction in the current month with a memo naming the check number and the two amounts. Credit or debit the same expense or payable account the check was charged to, so the vendor's balance stays right.
For an encoding error or an alteration, leave the ledger at the amount you wrote. On the reconciliation, add the excess back to the bank balance as a bank error, with the check number and the date you reported it. When the bank credits the difference, the item drops off. Do not book the excess as an expense and then book the refund as income; that puts a payment that never happened into the books.
A gap that does not tie to an obvious line in the month may still come from a check like this, paid for slightly more than written. Methods for pinning such a gap to one line are in finding a reconciliation difference line by line.
When should you contact the bank about a check amount?
Contact the bank as soon as the image shows a figure you did not write, whether the cause looks like encoding or alteration. Do it in writing, attach the image and your register, and keep the date. The law gives the bank some protection and the customer duties that depend on prompt review.
Two parts of the Uniform Commercial Code shape the position. UCC section 4-401 at Cornell's Legal Information Institute says that a bank paying an altered item in good faith may charge the account according to the original terms of the item. In other words, if a $418.00 check is raised to $4,180.00, the bank may charge you $418.00, not the altered amount.
UCC section 4-406, also at Cornell's Legal Information Institute, requires customers to examine statements with reasonable promptness. A customer who does not report an alteration within one year after the statement or items are made available is barred from asserting it against the bank. Repeated alterations by the same person can also be the customer's loss if the customer did not review and report within a reasonable period after the first statement showing one. The deposit agreement can set shorter notice periods, so read your own.
Report an encoding error the same way, even though it is a mistake rather than a crime. The bank that encoded the check may be a different bank from yours, so the correction can take time, and the reconciling item may sit on the list for more than one month.
When the difference is part of a pattern
One wrongly cleared check is usually an error. Several checks to one payee, each clearing for more than written, are not. In a business, that points to an insider or a payee altering checks. In a divorce or family dispute, checks that cleared for more than the register shows can be part of the evidence that one party moved money out; dissipation of marital assets covers how that evidence is assembled.
PreciseBankFlow reads check numbers and amounts from each statement and matches them to your register, so a check whose cleared amount disagrees with your register sits among the lines that did not match, not inside an unexplained total. You can see how on the PreciseBankFlow homepage.