One of the first steps in setting up a business is to open a business bank account. This will allow you to receive payments from your customers and it will also allow you to make payments to your suppliers, will allow you to pay your taxes and you will be able to sort out all the internal costs of the business-like payroll.
Most common use of business checks include:
- Purchasing inventory and supplies
- Payroll expenses
- Marketing costs
- Tax payments
- Vendor payments
- Travel
- Insurance
- Accounting services
- Utilities
- Equipment purchases.
In today’s society it may seem difficult to choose your payment choice, especially within todays fast paced technological world. Business checks can be something easily overlook as an option by many business owners. Many thought that checks would be fazed out as they are considered an ancient payment method. However, they remain just as relevant and it a useful tool within a business regardless as to whether the business is small or large.
What is a Business Check
Fundamentally, a check is a document that orders a bank to pay the amount specified on the check to the recipient’s bank account. A business check is essentially a personal check, the difference is it is based on a company’s assets rather than a personal account. To write a business check you need to have a business account from which the funds will be transferred from.
Types of Business Checks
There two main types of business checks, manual and computer:
- Computer or Laser Business Checks
These allow a business to issue pre-printed checks from their computer using accounting software such as Intuit checks . These are often regarded as convenient, as they allow for easier documentation and tracking of finances.
Pros:
- Security: With encryption and authentication features available, computer check writing gives businesses better financial security and reduces the risk of fraud.
- Efficiency: Businesses can print their checks quicker and more accurately, saving time and money by not having to do it manually. They can also set up recurring payments to further reduce costs.
- Flexibility: Checks can be printed any time and from anywhere, giving companies a faster, more efficient response to customers and suppliers.
- Customization: Computer checks can also be easily customized with company logos, branding, and more, creating a more professional and cohesive appearance.
- Space Saving: Not having to maintain physical records frees up space and reduces costs even further.
- Back-Ups: When used with accounting software, computer checks provide financial records that are backed up online.
Cons:
- Despite cost savings, computer checks do require an initial investment that may be out of reach for smaller companies.
- May be more suitable for businesses that involve a high volume of transactions, payroll payments, etc.
- Manual Business Checks
A manual check only comes partially pre-printed with the necessary information. This means that the business will need to fill in the relevant information such as the payee, the amount and the date it was issued etc.
Pros:
- They are easy to put in a pocket and use on the go.
- A straightforward and cost-effective solution for small and mobile businesses.
- Writing checks by hand can allow for a high level of financial control over all payments.
- Cheaper to initiate than computer checks.
- Easy to understand and use. No technical knowledge required.
Cons:
- Manual checks may not be compatible with a company’s bookkeeping software.
- In larger volumes, manual checks can require more work to keep track of.
- Physical transaction records can be lost and require storage space.
Choosing the Right Type of Business Check for Your Needs
Making the decision on which check you will use depends on your business’s specific needs. Particularly payment volumes and operational requirements and personal preferences. A business will need to weigh through the pros and cons above to make a more informed decision so that you choose the best format for you and your business.
It is wise to consider cost, customization, convenience, speed, accessibility, record-keeping, security and storage. Don’t forget that as your business grows and evolves, you should regularly evaluate your business needs and check usage, and adjust your preferences going forward.
All businesses have their own set of unique needs, from one-man outfits to large multi-national companies. But no matter what size or type of business you are running, you can be sure that there’s a business checking account out there that will meet your needs.
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