How to Set Up Two Signature Checks

Two signature checks are exactly what they sound like—a check that requires two signatures to be issued. They are used as an internal control when it comes to business financial management, ensuring that two people have to be aware that a check needs to be issued.

Businesses that use two signature checks don’t necessarily require all of them to have two signatures. Often times, instead, it’s based on the amount of money being issues. Larger amounts require more oversight. If this is a policy that you’re thinking about implementing in your own company, let’s talk about how to set up two signature checks and how they work.

Are Two Signature Checks Good Internal Controls?

The jury tends to be out on whether or not having a two signature check policy is a good internal control or not.

On one hand, two signatures mean two eyeballs looking over the information. That would typically mean that there are going to be fewer mistakes when checks are cut inside the organizations. Likewise, two people looking over the information before signing means that they both have to agree that the amount is reasonable and payment should be made before it is.

However,  as far as whether or not it is a truly beneficial internal control—well, they remain internal. Typically, a bank isn’t watching out that two signatures are actually on the check. They consider these to be mostly an internal company thing and, in most cases, only require one signature to be on the check for it to be cashed or deposited. That means that double-checking that a second signature is actually on the check is up to those working with it.

Likewise, when you set up two signature checks, you’re adding another step into the process. The increased red-tape means that your financial matters will go slower, especially on bigger purchases. That’s not necessarily a bad thing, but it is something you need to consider when you’re planning to make those purchases.

How Can You Set Up Two Signature Checks?

If you’re looking to set up two signature checks, then you’ll probably go about it one of two ways:

You can work with a bank that offers two signature checks. That is checks with spaces for two signatures right on them. Most banks tend to offer this, but you will need to double-check with your bank before assuming they do.

Alternatively, you could use a program like eCheck or something that requires a second “signature” internally before a check could be issued. Using an electronic system like this doesn’t necessarily mean that you’ll actually have to set up two signature checks, instead, you can collect the “signatures” and approvals before the check is actually printed.

Should You Use Them?

It’s completely up to you whether or not you set up two signature checks. In some cases, especially if your organization is larger or makes lots of larger purchases, an internal control like this might make sense. That said, it certainly doesn’t make sense for every business.

Do you use two signature checks? Share your thoughts and experience in the comments below!

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