What Is the Meaning of Cut a Check?

Checks are rarely cut today.
Image Credit: Peter Cade/Photodisc/GettyImages

To cut a check originally meant to pay someone by paper check, with the term most frequently used in business. When a check is to be cut, the understanding is that the deal is done and the person will be paid soon after the check is ready. Checks are used to conveniently conduct secure financial transactions, where the payer pays the payee.

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Checks also offer the convenience of tracking costs and expenses by dispersing the exact amount of money intended. Cutting checks adds speed and efficiency to the weekly task of paying employees and service providers.

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Before Digital Financial Transactions

Check writing was a long and arduous task for those who had to write hundreds of payroll checks each week. When employers needed large-scale check processing or if they decided to outsource their payroll tasks to their local banks, the checks were then printed and processed by machine. They were often accompanied by a check stub which recorded the date, payee and amount of the check, according to AccountingTools.com. The checks were then separated by pulling along a perforated line, with the stubs staying in a three-ring binder for convenience.

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Going back many years, many government didn't issue paper currency, which required people and businesses to issue drafts from their banks, where they were cashed, explains Fin.com. This led to the mass use of checks.

The Literal Meaning

Before perforation, some checks were literally cut from the book of checks, leading to the "cut the check" meaning. To cut a check meant literally cutting it away from the rest of the paper, often with a paper cutter, which many (if not most) business office had. The amount of the check, the person's name, the proper signature and the current date were printed on the check, then it was cut out of the check book.

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Paper cutters were especially convenient if multiple checks were being written and cut because they could cut through more than one sheet of paper at a time. For example, if you needed to cut nine checks, and each page in your checkbook had three checks on it, you'd stack three pieces of paper (lining them up carefully), then make three cuts with the paper cutter, cutting through three pieces of paper, creating nine separated checks. When many checks were needing, this process was automated.

Types of Machinery

As far as the machinery used for creating, writing and separating checks, there are check writers that print the data onto the checks, and check signer and endorser machines that add the feature of engraving signatures or stamps onto the checks. Some models process individual check paper sheets, while other machines process a continuous feed of check paper that is then cut into separate checks.

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Using Payroll Services

Service companies are available to cut checks and vouchers for businesses. Their services allow the business to simply submit a spreadsheet or document detailing the names, amounts, dates of the checks and the required signature image. They then print and cut the checks, making them ready for easy distribution. Likewise, many businesses have a payroll department or an employee that manages payroll, and they can easily add the check processing machine to their office equipment.

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Different Check Options

Checks are still cut, even though there are the options of direct deposit into bank accounts, money exchange accounts, such as PayPal and deposits made to card balances. Check processing, however, is a direct note to the financial institution that the account exists in and to the money that is drawn upon. Checks in circulation include personal checks, business checks, bank checks, certified checks, cashiers checks, government checks, travelers checks, school/university checks and money orders. The issuing of any of these checks is to cut the checks.

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