ExecutiveChronicles | How to Differentiate Between a Quality and Basic Check | A check is a note to the holder of an account, a payer, to their bank to pay the sum of money written on it to the bearer – that is, whoever the check is given to. Checks are a flexible way to make payments and many businesses use them for a variety of different functions.
There are different types of checks:
- Personal Checks – paid from an individual’s account, usually known as a ‘checking account’ and one of the most commonly used types of check.
- Cashier’s Checks – these draw money from the funds of the financial institution that issues them, usually banks and credit unions. These are often used for large purchases or payments to reassure the recipient that the funds are available to them.
- Certified Checks – these are similar to cashier’s checks in that they are also underwritten by the financial institution, but they draw funds directly from the payer’s account, like a personal check. The certification just proves that the account holder has enough money in their account to complete the transaction and they are also often used for larger transactions.
- Electronic Checks – these transfer funds through an online transaction, allowing payments to be processed quickly with recurring payment options that make them popular for regular bills such as utilities, rent, or mortgage.
- Business Checks – businesses that want to make payments by check can pull funds from the company’s account using business checks that are ideal for everything from payroll and expenses to paying suppliers and subcontractors.
Why Do Businesses Use Checks?
Businesses can benefit hugely from using checks for a variety of purposes, including increased safety and security. Using checks is as easy as using cash, but they create a paper trail that can be used to verify and document payments.
Many businesses use checks to make financial auditing and tax preparation easier as every payment in and out of the business can be accounted for and they have little value for thieves. They are also ideal for businesses that deal with clients or suppliers that aren’t able to process electronic payments.
Choosing Checks for Your Business
Not all business checks are made equal and there are some features and options that can make your business checks work harder to help you keep your accounts in order. The technology involved in processing checks is so advanced that many businesses now use laser business checks that are compatible with the accounting software that they use.
There are many different accounting systems that can recognize a variety of compatible checks, making it much easier to process payments into and out of their accounts. Operations that process a lot of transactions will appreciate the speed and accuracy that they get from laser checks.
Other businesses need their checking systems to enable them to be more flexible, opting for manual business checks that can be drawn up anywhere, even without access to a computer or printer. Businesses can choose travel convenience checks for making payments on the go as they are designed to be used when out and about.
From the smallest sole trader to the largest multinational, one of the most important parts of running a business is keeping detailed and accurate records of your accounts. There are plenty of tools that can contribute to this process, including using high-quality checks that incorporate the latest safety features such as:
- Special paper stock that can be tested for and is never sold without being customized.
- Watermarks that are printed into the paper, making them impossible to replicate or scan.
- Inbuilt sensitivity to certain chemicals to make tampering with them impossible.
- Fluorescent fibres in the fabric of the check that show up under UV light.
- Special dot patterns that are activated by copying or scanning to void the original.
- Microprinting that is indiscernible to the naked eye but will blur when scanned.
Whatever your business, there are plenty of benefits to using the highest quality checks in order to make your accounting as easy as possible and make it easy for your finance team to keep your records accurate and up to date.