I rarely use checks, mainly because they cost money. I rather started sing free electronic payee checks. I sue checks to send monthly rental. Apart from that occasional expenses are paid through checks. Sometimes when we eat out or travel together and someone pays on everyone’s behalf, I return my share by writing a check to the payer.
This is an article geared towards saving money on ordering checks and things to take care of before you order checks for your business. Are we still using paper checks only because “we have been doing it this way for years and it works for us”?
As a young finance executive every afternoon I went to my boss with a pile of checks for his signature. Before that I and my colleagues would have spent considerable amount of time preparing the checks. Amongst all the people involved in this task it was perhaps one man-day of work every day.
Enter ERP. It reduced certain amount of transactional load in arriving at what amount should be paid to whom. But the task of writing checks, signing, mailing them to suppliers and others remained.
Even in today’s times of EFT (Electronic Fund Transfer) there are organizations which are still using checks.
Today governments as well as banks are encouraging us, individuals and businesses, to move to electronic modes of payment. The banking data clearly shows rapid reduction in transactions using checks. There are those who wonder when will we stop seeing checks?
How Does an Individual Save on Checks
People like me have not walked into the bank for 8 years since I opened my account there. Initially credit and debit cards took care of my simple shopping cash withdrawal.
- Now that I receive my payments directly into my account through electronic transfer I do not need to spend time to deposit check or get cash. I not only save on cost of checks and my commute to the bank, I even save on the occasional late payment penalties that I used to pay for my monthly utility bills. ACH (Automated Clearing House) ensures that my utility and loan payments happen on the date that I have specified without my writing a check.
Businesses and individuals can save on checks. Savings can be in direct costs, ease of use or better security.
What Can Businesses Save on Checks
The high bank charges for handling check transactions is, on the face of it, major reason for individuals and businesses looking at moving away from paper checks. But saving on transaction costs is only a part of the savings.
- For a business consider the savings on manpower in writing checks, mailing costs, cost of going to bank and depositing a check that is received towards payment. Add to that the pain and cost of follow ups. If one adds up all of this an organization can save a considerable amount of money moving to electronic modes of payment.
- Electronic fund transfers also improve security. As per 2013 AFP survey 85% of the organizations affected by payment fraud say that checks were targeted. The same survey goes on to say that overall incidence of payment fraud is decreasing with decreasing use of checks.
- With the speed and accuracy of transactions in electronic modes of payments, businesses can have better control on cash flow. There is faster movement of funds. This not only brings predictability to cash flow. It also has impact on holding cost of money.
- Reconciliation process in case of paper check is quite painful. Moving away from checks will save businesses manpower costs and a lot of pain.
- There is a major breakdown in factory. You need vendor to ship necessary component today. No sweat. RTGS [Real Time Gross Settlement] will ensure that vendor receives payment now. [Note : RTGS is called by different names in different countries.]
Things to keep in mind when ordering business checks
What starting a business, most people would rather not spend money an extraneous expenses that are not absolutely necessary. Because of this, many entrepreneurs try to bypass using business checks, thinking that they will save themselves the expense of a business accounting program, and the actual checks.
In fact, business checks are one of the most important investments when starting a business. Together with an accounting program, they will help keep the company’s finances in order, and can save a company from mountains of debt due to sloppy bookkeeping and forgetfulness.
The first step is to choose an accounting program. Some popular ones are Quicken, Quickbooks, PeachTree, Microsoft Money, and others.
After researching each and selecting one, the next step is to order your first business checks. Most online check printing companies offer checks that are compatible with almost all check printing programs.
It is important to research check printing companies, also. This is because the company you use will often result in a long term commitment of ordering checks from them. Many companies offer discounts on reorders, and after you are happy with a company’s system there is no reason to change.
When researching, check that the check printing company has good testimonials, and adheres to stringent security standards to safeguard against identity theft. Also check that the company offers the features that you require on your checks.
Ordering business checks online is easy. Write down your business account number, and make sure to double check to ensure that the number is correct. Also write down your bank’s routing number, and double check it, as these two things are important pieces of information.
Decide how you will file the checks and their stubs, for that will determine whether you order checks with one stub, three stub, or another format.
Now comes the fun part. There are an abundance of designs and font options, as well as layouts to choose from. Keep in mind that you want to convey a professional air, so don’t put too many graphics onto the check.
A nice touch is to upload your company’s logo, and place it on the corner of the check. This is an option that many online check printing companies offer. Just bear in mind that many of the graphics incur an extra charge, so be careful to only do extras that truly enhance the check.
You will be required to enter your business information, as well as some of the bank’s information. Be careful to enter it accurately, because a mistake could cost you a lot of time and money. That’s all there is to it!
When you print checks, the information will be automatically recorded by your accounting program, saving you lots of time and aggravation.
Some businesses order their checks straight from the bank. This is convenient, but remember that banks will not allow you as much personalization on your business checks. Also, they may be more expensive, because they are a middleman between the check printing company and the end consumer.
Some adventurous small business owners even print checks themselves. Although this may save money, the time it takes is also money.
Figuring out how to format the check, configure the paper to the printer, and the other technical details can take time, as does the waste of paper as you try out different ways of printing. Other entrepreneurs manually write out business checks, as they do personal checks.
This is simple and cost effective, but the information will not be recorded electronically, leaving room for human error.
For any business no matter how big or small, the best option for business checks is usually to order them from a professional online check printing company
Steve Crane says
Here in South Africa cheques are hardly used anymore. As far back as the 1990s cheque fraud became so pervasive that shops started making you feel like a criminal when you wanted to pay by cheque, rubber stamping forms onto the back of the cheque and requiring you to complete them with comprehensive personal details. Petrol stations stopped accepting cheques for fuel purchases in the 1990s or perhaps even in the 1980s. Today most stores will no longer accept cheques and they have been replaced by debit cards for in store purchases and online bank transfers for paying accounts. I write only one cheque per year when I renew my car licence, as our local licencing office has no card or electronic transfer facilities, accepting only cash or cheque.
[email protected] says
Seems that there are sometimes significant fees for using electronic transfers, however.
Anton Ivanov says
I hate using checks both for personal and business use for many of the same reasons you listed. I wish we would already migrate to 100% electronic payment systems around the world, but I guess you can’t rush progress.