Writing Checks - Basic Concepts

What is required:

In real life, when a person wants to go shopping they need several conditions to be true.  They need some money to shop.  They require an 'Item' to purchase.  Finally, they need someone to buy the desired item from.

Let's give names to these three conditions and give some examples.

• A 'Contact', is the person or business  from whom you buy something.  The contact name is placed on the 'Pay to the order of' line of the check.  

• A 'Bank account', is a common place to keep your money.  It is the bank account where the check funds are withdrawn when a check is written.

• The 'Items' are the things that one pays.  At home this could be rent, the telephone bill and the electricity bill.  In a business, some of the expense categories could also be rent, office equipment and electricity.

When you want to make out your first check in TeemWork, these same conditions must also be true.  

The 'Contact'.  

The 'contact' is the person or organization that is to be paid. To enter a contact in TeemWork, click the 'Contacts' menu bar selection.  The menu bar is shown in the first slide.

The 'Contacts' window is illustrated below.  

Your team may have several different 'Contact Types.'  In the next slide, the contact type, 'Supplier' is selected.

Next, select the supplier that is to be paid with a click on his row in the supplier list.  

If you are purchasing an item from a supplier for the first time, then you need to add the new supplier to the list.  To learn how to add a new contact type, click here.  

The following slide shows the contact card for supplier, 'Southern California Edison'.

When the Edison contact card detail window opens, users who have the right to 'view' checks can click an additional button.  This button is labelled, 'Show Checks List' and is located near the bottom of the window.  

Click this button to view the checks that have been issued to 'Southern California Edison.'   

Of course, a check must be 'entered' before it can be 'viewed'. One must set up a bank account and define the expense categories before a check can be 'entered'.

The 'Bank account.'  

Here are the steps to set up a bank account.

First open the 'Accounting' menu bar selection.  Next select the 'Manage GL Accounts' option. The slide below illustrates the 'Accounting' menu bar selection and the 'Manage GL Accounts' option.

Below is a slide of the 'Manage GL Accounts' window.

GL accounts are simply categories.  

A bank account is one example of a typical GL account.  An expense, like 'rent' can also be a GL account.  The categories used by your team depends on the level of accounting detail that your team requires.  For more information about GL Accounts, read, 'What are GL Accounts?'

The top portion of the GL window displays a list of all the GL accounts.  The bottom tab shows the details of the highlighted row in the list.  In the above slide, the bank account is highlighted in yellow.

Here is how the bank account was added to the GL accounts list.

First, click the first field to the left in the tab.  It is labelled, 'Account Details.'  Add new GL accounts using this tab.  

Next, click the drop down menu labelled, 'Type.'  Bank accounts belong to the 'Asset' category type.  Select 'Asset' from the list.   

Assets often have a GL account number that begins with '1'.  In our example, the bank account has a GL account Number of '1050'.  

In TeemWork, GL account numbers may be alphanumeric and of any length up to 50 characters. Usually, all GL account numbers are shorter, are numeric and are all of equal length.  In our example, we will use 4 digit GL account numbers.  To learn about the GL Account types, read, 'What are the GL Account Types?'

Then select, 'Bank' from the third field from the left labelled, 'Code.'

After the code 'Bank' has been selected, we need to add a name to this field.  The name is entered in the field labelled, 'GL Account Name.'  

In this case, the name is 'Bank No. 210'.  The next slide show the GL refer name being entered.

Next, you may enter a comment in the 'Comment' field.

The final step is to save the new GL 'bank' account.  Click the 'Save' button to finish adding the account.

The 'Expense' -- 'Southern California Edison'.

Here are the steps to add the expense account.  It is also a GL account.

Open the 'GL account' window as you did in the previous example.  Click the 'Accounting' menu bar selection and then select the 'GL Accounts' option.

The next slide show the 'GL Accounts' window.

Click the left field in the 'Add and Modify' tab.  

It is labelled, 'Account Details'.  Next click the 'Type' drop down list.  Select the 'Expense' type.  This is shown in the next slide.

Often, the GL account numbers of 'Expense' GL accounts begin with '4'.  In our example, we want to add a GL account for 'electricity' expenses. We will use GL account number '4500' for this category of expense.

After the GL account numbers and type has been entered, enter a GL account name in the field labelled, 'GL name.'  In our example we the GL account name is 'Electricity.'

You may enter a comment for the GL account.

The final step is to save the new account.  Click the 'Save' button.  This is shown in the final slide.

So far in our example, you have learned what goes in to setting up the proper accounts.  You can enter a check that is payable to the electricity company to pay for expenses of the category 'Electricity'.

To learn how to enter your first check, read, 'How to enter a check?'.  

Related topic:

To learn more about GL Accounts, read,  'What are GL Accounts?'

Return to Accounting - Table of Contents.