Checks have been an alternative to cash for a long time in banking history. You may find it hard to believe, but many institutions still prefer checks over any form of electronic payment method. Many of these institutions will also charge you a fee if you want to pay by debit or credit card. That is because most banks charge these institutions a certain percentage for every transaction. On the other hand, banks do not levy any fees for checks, so the institutions will get the entire amount as long as the issuer’s account has sufficient funds.
Businesses of all sizes exist because they need a steady form of cash inflow. Any Interruptions with the flow can cause a business many troubles. That is why they prefer to use a reliable method of payment that they can count on. There is no denying that most businesses are turning to electronic forms of payment these days. But many businesses also prefer the use of checks for particular types of transactions. But what if you run out of checks? How will you make your urgent payments when you have been relying on them. If you are wondering where to get business checks the same day, there are online websites that provide express options to print personalized business checks.
Like everything else in the world, using checks also has certain advantages and disadvantages. In this article, we are going to discuss the pros and cons of the business’s point of view. We are also going to understand why some businesses still prefer to use checks in the 21st century.
Advantages
Checks Are Simple to Issue
Many small businesses do not have electronic means of payment set up in the initial days. Issuing and receiving checks are easier in that period. Writing checks are also more convenient than electronic payments at times. For most online bank transfers, businesses have to add the details of the receiver to their online banking website and wait for 24 hrs before they can send a payment. It can be inconvenient for both the business and the receiver. On the other hand, you only need to write the name and amount on checks before handing it out as a payment to your vendor or employee. The receiver also has the choice of getting cash for the payment or depositing it in their account, which is not the case for any form of electronic payment.
Funds Take Time to Get Debited
Once you issue a check, you can expect the funds to take some time before they get debited from your account. The recipient will have to deposit the cheque, after which it takes a day or two before the money gets transferred from your account to the receiver’s account. It can allow you to arrange your finances in case you need to. You can also post-date a check and ask the recipient to deposit it at a later date in case you need to arrange for funds in the account.
Checks Can Increase Your Customers
By accepting checks, you can get the business from many customers who do not prefer other forms of electronic payments, such as debit or credit cards. You will also be able to accept payments if there is a problem with the other modes of electronic payment methods.
Business checks are also powerful marketing tools. You can print your business logo and taglines on the cheques, which means that they will be visible to every person who comes across it. Checks can be used to increase brand awareness in the market. A professional-looking check can also improve your brand image.
Cheques Can Be Stopped
Vendors and service providers are not always professionals. If you have availed a product or service recently and felt cheated, you can stop their payment if you have paid by a check. There is no way to stop an electronic payment once it has gone through. However, if one of your vendors supplied you with inferior products or services, and you made the payment with a check, you can ask your bank to hold the payment. It will ensure that the vendor makes things right before they get paid.
Disadvantages
The only real issue with checks is that they can have security issues. Checks are susceptible to fraud, which can cost you thousands of dollars. It is difficult to trace a cheque fraud most of the time because it does not leave a trail like electronic transactions. Since cheques take time to clear, the forgers could have gone miles away before you can figure out and alert the bank of fraudulent transactions.
Whether you choose to use checks or not depends entirely up to you and the type of your business. Despite a few problems, checks are still popular for business purposes because they have quite a few advantages over electronic payments. So it will be wise to cash those advantages while you can.