Void Check

Intro to Void Check?

A void check is a standard bank check that has been marked as “VOID,” rendering it unusable for financial transactions while preserving the banking information it contains. In business and payroll contexts, void checks serve as secure documentation of bank account details needed for setting up direct deposits, automatic payments, and electronic fund transfers. Understanding the purpose and proper handling of void checks is essential for HR professionals managing payroll systems and employee banking information.

Definition of Void Check

A void check is a paper check that has been invalidated by prominently writing “VOID” across its face, making it impossible to use for payment while preserving the banking details printed on it. These banking details typically include:

• The account holder’s name and address
• The bank’s name and branch information
• The routing number (also called ABA number or transit number), which identifies the financial institution
• The account number that uniquely identifies the account holder’s specific account
• The check number (which is irrelevant once the check is voided)

The primary purpose of a void check is to securely share bank account information for setting up electronic transactions without risking unauthorized use of the check itself. Organizations commonly request void checks from employees for direct deposit setup, from vendors for automated payment arrangements, or from customers for recurring billing authorizations.

It’s important to note that while physical void checks have been the traditional method for sharing banking information, many financial institutions and payroll systems now accept alternative verification methods, such as direct deposit authorization forms, bank letters, or screenshots from online banking platforms showing the relevant account information.

Importance of Void Check in HR

Void checks play a significant role in several HR and payroll processes:

Direct Deposit Implementation: The primary use of void checks in HR is for setting up employee direct deposits. According to the National Automated Clearing House Association (NACHA), over 93% of U.S. employees receive their wages via direct deposit, making this function critical for modern payroll operations. Void checks provide the necessary banking details with built-in verification that the employee has legitimate access to the account.

Accuracy in Payment Processing: Banking errors in payroll can create significant problems, from delayed compensation to misdirected funds. Void checks provide visual confirmation of banking details directly from the financial institution, reducing the risk of transcription errors that might occur when employees manually enter this information on forms.

Compliance Documentation: Organizations often maintain void checks or equivalent documentation as part of their compliance records, demonstrating proper authorization for electronic fund transfers. This documentation may be important during audits or if payment disputes arise.

Process Efficiency: By establishing electronic payment channels through void check verification, HR departments eliminate the need for paper check processing, significantly reducing administrative costs and processing time. The Association for Financial Professionals estimates that paper check processing costs organizations 10 times more than electronic payments.

Employee Financial Security: Direct deposits established through void checks enhance employee financial security by eliminating risks associated with paper checks, such as loss, theft, or delays in delivery. This contributes to employee satisfaction and reduces time spent resolving payment issues.

Examples of Void Check

Example 1: New Employee Onboarding Direct Deposit Setup
During new hire onboarding at a technology company, HR requests that employees provide a void check for direct deposit enrollment. Jennifer, a new software developer, receives this request as part of her digital onboarding packet. She takes a personal check from her checkbook, writes “VOID” in large letters diagonally across the face of the check (being careful not to obscure the routing and account numbers at the bottom), and scans this document. Jennifer then uploads the scanned void check to the company’s secure employee portal along with her completed direct deposit authorization form. The payroll department uses the routing and account numbers from the void check to set up Jennifer’s direct deposit, ensuring her first paycheck is automatically deposited into her account on payday. The company retains the digital copy of the void check in Jennifer’s confidential employment file as documentation of proper authorization.

Example 2: International Contractor Payment Setup
A marketing agency hires Carlos, a graphic designer based in Mexico, as an independent contractor. To facilitate international payments, the company’s finance team requests banking information from Carlos. Since the international banking system relies on different identifiers than U.S. checks (such as IBAN or SWIFT codes rather than routing numbers), a traditional void check isn’t applicable. Instead, Carlos provides an official bank letter on his financial institution’s letterhead that includes his account number, the bank’s SWIFT code, and his account type. The agency’s finance department uses this information to set up Carlos in their payment system for monthly contractor payments. This example demonstrates an alternative to the void check process that serves the same verification function in an international context where different banking identifiers are used.

Example 3: Employee Banking Information Update
Sarah, a long-term employee at a manufacturing company, recently changed banks and needs to update her direct deposit information for payroll. Following the company’s established procedure, she completes a direct deposit change form and attaches a void check from her new bank account. She writes “VOID” prominently across the check in permanent marker without obscuring the banking information. Sarah submits these materials to HR by the payroll cutoff date to ensure her next paycheck is deposited to the new account. The HR department updates her banking information in the payroll system using the routing and account numbers from the void check, then securely stores the documentation according to their records retention policy. The void check serves as verification that Sarah is an authorized user of the new bank account, reducing the risk of fraudulent account changes.

How HRMS platforms like Asanify support Void Check

Modern HRMS platforms provide sophisticated capabilities related to banking verification and direct deposit management:

Secure Digital Upload: Advanced HRMS systems offer secure channels for employees to upload digital copies of void checks or alternative banking verification documents. These uploads are encrypted and stored according to data protection standards, minimizing security risks associated with handling sensitive financial information.

Automated Information Extraction: Sophisticated platforms incorporate optical character recognition (OCR) technology that can automatically extract routing and account numbers from uploaded void checks, reducing manual data entry errors and improving processing efficiency.

Alternative Verification Options: Recognizing the declining use of paper checks, comprehensive HRMS solutions provide alternative methods for verifying banking information, including structured electronic forms, bank verification API integrations, and multi-factor verification processes.

Banking Information Management: HRMS platforms maintain historical records of banking information changes, creating audit trails that document when changes were made, who authorized them, and what verification was provided—supporting both compliance and security needs.

Employee Self-Service: Modern systems enable employees to initiate banking information updates through self-service portals, submitting void checks or alternative verification digitally with appropriate authorization controls to prevent unauthorized changes.

International Payment Support: Advanced HRMS solutions accommodate various international banking formats beyond traditional void checks, supporting global workforces with appropriate verification methods for different banking systems worldwide.

FAQs about Void Check

How do I properly void a check for direct deposit setup?

To properly void a check, write the word “VOID” in large letters across the face of the check using a blue or black permanent marker or pen. Make the lettering large enough to be clearly visible but avoid covering the banking information at the bottom of the check—specifically the routing number and account number. These numbers are typically printed in computer-readable magnetic ink character recognition (MICR) font. It’s best to write “VOID” across the payee line, amount box, and signature line to ensure the check cannot be completed for payment. Once voided, make a copy or scan of the check for your records before providing it to the requesting organization. Never sign a voided check, as this is unnecessary and could potentially create security risks. If you’re concerned about security, you can also write “FOR DIRECT DEPOSIT ONLY” below the “VOID” marking.

What alternatives can I provide if I don’t have paper checks?

Several alternatives are commonly accepted in place of void checks: First, a direct deposit authorization form provided by your employer or the requesting organization, completed with your banking details. Second, a bank letter or statement on official letterhead that includes your name, account number, routing number, and account type. Third, a printed or screenshot image from your online banking portal showing your account information (ensure it displays your name, the bank name, routing number, and account number). Fourth, a starter or counter check obtained directly from your bank branch (these typically have your account information pre-printed, though you should still void them before submission). Fifth, a pre-printed deposit slip that contains your account information, though not all organizations accept these. Most modern financial institutions offer at least one of these alternatives for customers who don’t have paper checks.

Are there security risks associated with providing a void check?

While void checks are generally secure when properly handled, some risks exist. The primary concern is that the routing and account numbers on void checks could potentially be used for unauthorized ACH transactions if the information falls into the wrong hands. To mitigate risks, only provide void checks to trusted organizations with secure handling procedures, never share images of void checks via unsecured methods like regular email or text messages, consider using alternatives like direct deposit authorization forms when possible, monitor your bank account regularly for unauthorized transactions, and securely dispose of void check copies when no longer needed. It’s also advisable to inquire about the requesting organization’s data security practices and retention policies for banking information. Most reputable organizations have strict security protocols for handling sensitive financial documentation, including encryption, access controls, and secure destruction policies.

How do organizations typically process and store void check information?

Organizations generally follow a structured process for handling void checks. Initially, authorized personnel in payroll or finance departments receive the void check through secure channels (physical delivery or encrypted digital transmission). They then extract and verify the banking information, entering it into secure payroll or payment systems with appropriate validation checks. The physical or digital copy is typically stored in accordance with document retention policies in secure locations—physical void checks in locked storage and digital copies in encrypted systems with access controls. Many organizations implement a “need-to-know” access policy, restricting banking information visibility to only those employees whose job functions require it. Industry best practices include regular security audits, employee training on handling sensitive information, and implementing destruction protocols (such as shredding physical documents or secure digital deletion) when retention periods expire. Reputable organizations comply with applicable data protection regulations like GDPR or CCPA when handling this information.

How long should employees or organizations retain void checks?

For individuals providing void checks, retention is primarily for personal record-keeping. It’s advisable to keep a copy until you’ve confirmed that direct deposits or automatic payments have been correctly established, typically through one or two successful transaction cycles. For organizations receiving void checks, retention periods should balance legal requirements, business needs, and data minimization principles. Most organizations follow these guidelines: maintaining active employee banking information for the duration of employment plus any required post-employment payment periods; retaining supporting documentation (including void checks) according to applicable tax and employment record requirements, typically 3-7 years depending on jurisdiction; implementing secure destruction procedures for documents exceeding retention requirements; and considering applicable regulations such as the Fair Labor Standards Act, state record-keeping requirements, and data protection laws. Some organizations are moving toward “scan and return” policies, where they digitize void checks, verify the information, and immediately return or destroy the original to minimize security risks while maintaining necessary records.