Any business that accepts off-site payment from customers or clients can use a check-by-phone system to create "demand drafts" or "sight drafts" that are legally accepted for deposit by banks. Accepting checks by phone eliminates the waiting time for checks sent through the mail. In addition, it provides convenience for customers who may be facing a late-payment deadline and fee.

Gather Information

Take a check over the phone using either an inbound or outbound call. Take the customer name as it is printed on the check, as well as the check number, which is printed in the upper right-hand corner of the check. You also need the 9-digit routing number, which identifies the bank on which the check is drawn and is printed in the bottom left-hand corner, and the account number, which is printed to the right of the account number. The customer must verbally agree to the amount of the check.

Basic Data and Deposit

Enter the information gathered from the customer into a software program, which will then print out a draft of the check (some check-drafting programs are server-based, meaning there is no software to install). The printed draft will show the payee (you or your company) and the amount, as well as the routing information, account number and date. No signature is required on the check. After it is endorsed, desposit this draft check into your bank account.

Authorization

Check drafts require only a verbal confirmation from the customer of the account information, date and amount. You do not need to record the authorization, but you do need to have the verbal agreement from the customer for each draft check created.

Record-Keeping

Always keep records of the time and date of the phone call used to generate the check draft. This helps you answer any questions or resolve any controversies that may arise with the customer. You are required to keep the date of the authorization and the date of the deposit and inform the customer of these dates. You must also inform the customer of the number of drafts to be deposited, if more than one, and the dates on which subsequent drafts will be deposited.

Advanced Check Drafting

Retrieve information for the purpose of check drafting via fax or online, although do so using a secure telephone or Internet connection. Advanced check-drafting software allows real-time check verification, e-mail confirmation to the customer, the processing of recurring payments and batching of draft checks for upload to your internal accounting software.

Source:

CheckComposer: Check by Phone and Fax FAQs

Electronic Payment Services: About Checks by Phone and ACH Processing