4 Crucial Reasons Why Every Company Needs Paper Checks

While it’s hard to deny the convenience of online banking and using credit and debit cards, it’s not the only payment solution available to businesses. Even in this increasingly digital world, paper checks still remain relevant to companies of all sizes.

There are certainly some cons to using physical checks – the potential to overdraft accounts, security concerns about certain types of checks, and even issues with merchants not accepting them as payment – but there are also plenty of pros to consider:

1- Physical checks create a paper trail.

Using paper checks is an excellent way to document all transactions and provide proof that payments were received, whether to vendors, creditors, lenders, or even the government.

Remember, accurate and detailed record keeping is crucial to creating a paper trail that tracks your transactions – both paid to others and money received. With each transaction, be sure to update checkbooks, including the date of a check, check number, who the check was made out to or received from, and a memo for what the credit or debit was for.

2- Payment can be stopped.

Unlike digital payment options, payments via paper checks can be stopped. There are a number of reasons a stop payment order could be an attractive option for businesses, as it provides more control over a company’s finances.

A few scenarios where a payment might need to be stopped including:

- Information on the check, including date, amount, and payee, are incorrect.

- A sale or contract for services was canceled.

- The check was stolen, lost, or damaged.

- The check was sent to the wrong address or lost in the mail.

- There are accounting errors.

- Fraud or a scam is suspected.

Many banks or credit unions will charge a small fee, usually around $35, for a stop payment order. It’s also important to act quickly to stop a check payment by calling or visiting the bank where the check was issued.

3- Checks can be post-dated.

In certain cases,businesses might need to write a check with a future date. In these cases, payees are expected – though not required – to wait until the date written on the check to cash it and the business or customer writing the check promises to make that payment on that date.

This option of post-dating checks can be helpful in several scenarios. In some cases, a business or client might be looking to avoid an insufficient funds charge but wants to move forward with a sale or contract for services anyway. Post-dating checks also help with scheduling payments and tracking expenses.

Laws regarding post-dated checks vary by state so it’s important to read and learn about local laws.

4- It could be difficult to change the payment process.

Many businesses are used to making their transactions using checks, which can be a complex process involving multiple steps – everything from orders and invoices to writing receipts and the disbursement of funds. For a number of companies, especially larger ones, it would be difficult and costly to change over from paper checks to a new system.

Ultimately, every company has different needs and challenges and should consider whether paper checks or electronic payments make the most sense for their business.