The words are not decoration, they win
Writing an amount out in longhand looks like a formality left over from another century, and it is easy to treat it as one. It is not. It is a control, and it has statutory force behind it.
The Bills of Exchange Act 1882, section 9(2) puts it plainly: "Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the amount payable."
So if the figures say £1,200 and the words say one hundred and twenty pounds, the payable amount is one hundred and twenty pounds. The reason is obvious once you see it: a figure can have a nought added to it in a second, and a comma moved in another. A written sum resists that, which is why the convention has outlived the cheque book that produced it and still turns up in contracts, deeds and undertakings.
Why the line ends in "only"
For the same reason. A sum that ends "…and fifty-six pence" has empty space after it, and empty space on a financial document is an invitation. "Only" closes the sentence. It is the written equivalent of drawing a line through the unused part of a form, and it is why you see it on cheques, bank drafts and letters of credit rather than in ordinary prose.
The "and" is a real difference, not a preference
British usage puts "and" inside a number: one hundred and twenty-three. American usage does not: one hundred twenty-three. Both are correct where they belong, and using the wrong one on a document reads as careless in exactly the place you least want to look careless.
There is a second "and" that catches people out, and it is not the same one. It comes before a trailing group under a hundred when larger groups came first:
- 1,023 is one thousand and twenty-three
- 1,123 is one thousand one hundred and twenty-three, with no extra "and"
- 1,000,023 is one million and twenty-three
The hundreds group carries its own "and", so adding another would be wrong. Get that rule slightly off and the output is subtly not English, which is worse than being obviously wrong because nobody can quite say why it looks odd.
Pence, not pennies
English does not pluralise minor currency units regularly. One penny becomes pencewhen you are counting money, never pennies. Dollars and euros take cents, and rupees take paise. These are stored rather than guessed at, because a rule that derives them would get pence wrong every time.
One more small convention: the minor part is written as a number of pence, not as a fraction. "Fifty-six pence", never "56/100". The test is whether it survives being read aloud, and a fraction does not.
Common questions
How do I write an amount in words on a cheque?
The amount, the currency unit, then the pence or cents, then "only". So £1,234.56 is "One thousand two hundred and thirty-four pounds and fifty-six pence only". The "only" closes the line so nothing can be added after it.
Why write the amount in words at all?
Because the words win. Under the Bills of Exchange Act 1882, section 9(2), where a sum is expressed in both words and figures and the two disagree, the sum denoted by the words is the amount payable. A figure can have a nought added to it in a second. A written sum cannot.
Is it "one hundred and twenty-three" or "one hundred twenty-three"?
Both, depending on where you are. British usage puts "and" inside the number, American usage leaves it out. It is a genuine difference rather than a preference, and the tool follows the convention of the currency you pick while showing you the other one alongside.
What does "only" mean at the end of a written amount?
It marks the end of the sum so that nothing can be appended to it. Without it, a line ending in "fifty pence" has room after it for somebody to keep writing. It is the same instinct as drawing a line through the empty space on a form.
Do I write pence as a fraction or as words?
As words, and as a number of pence rather than a fraction of a pound. "Fifty-six pence", not "56/100". That is how a cheque is written and how the amount is read out loud, which is the test of whether it is unambiguous.
Should it be pennies or pence?
Pence. English pluralises minor units irregularly, so one penny becomes pence rather than pennies when you are counting money. The tool handles that, along with dollars and cents, euros and cents, and rupees and paise.