A notation on a negotiable instrument, often appearing in the lower-left corner, provides a space for the payer to indicate the purpose or reason for the payment. For example, a check written to a landlord might include “Rent for July” in this area, while one remitting payment to a contractor could state “Invoice #1234.” This notation is non-binding and does not legally dictate how the payee must allocate the funds.
This informational area serves several practical purposes. It assists the payer in tracking expenses and reconciling bank statements. For the payee, it can aid in identifying the payment’s intended application, particularly when multiple outstanding invoices or obligations exist. Historically, this practice developed as a simple method for record-keeping, predating sophisticated accounting software. Its enduring presence on modern checks highlights its continuing utility as a convenient reference point.
