Electronic Checks versus Manual Checks
As you get deeper into your business and your company grows, you may choose to automate several aspects of your accounting and dealings with customers.
You may decide that you will only accept certain forms of payment, a determination that can affect your business for better or for worse. One of the most important decisions to make is whether or not to accept checks and, if you do, whether to process the payment as electronic checks. How much does the electronic check system cost, and will it be too expensive or save you money in the long run?
While few people write checks anymore, there are those who are more comfortable with the pen and paper payment and don’t trust debit and credit cards. Many businesses have gotten away from accepting manual checks, while others have invested in software and electronic devices that will process this form of payment as electronic checks, verifying funds immediately and working the same way as a debit card, accessing and withdrawing the payment automatically from an account.
Electronic checks guarantee that funding is available within an account and will make sure you don’t take any “hot checks”. A verification system helps you make sure you get paid for your sale and don’t get penalized for attempting to deposit a check that will come back showing insufficient funds on the part of the customer. After all, many banks will charge a fee for this processing. On top of that, you must then spend more money to contact the customer whose check bounced in order to alert them of the problem, request repayment, and charge your fee for the bad check. Even this won’t guarantee repayment from the customer, meaning you’ve spent a lot more money than it was worth.
With a system that processes such payments as electronic checks, you will instantly know that the funds are available in the customer’s bank, and the system will debit that account right away, just as it would with a debit card, assuring that the payment goes through with no mishaps. This saves you the time and money involved in tracking down customers and makes the client happy as well. He or she can still write a manual check and not worry that the check will bounce later should they forget to record the transaction. It makes the shopping experience work out more smoothly for both of you, meaning that you can maintain a strong relationship with your customers and not have to be the bearer of bad news.
At the same time, processing electronic checks will also let you know if there are currently insufficient funds to cover the cost of your sale, meaning that you can inform the client right away that the balance is insufficient and offer them the opportunity to try another form of payment. This will avoid not only your bounced check fees but also those charged by the customer’s bank. It will also help to continue with the sale in a safe fashion that doesn’t lead to accidental (or sometimes purposeful) fraudulent transactions.
Overall, while you will have to invest in a software package and a verification system that links up to the internet to track the financial availability, electronic checks offer more savings n the long un for you and your customers, avoiding the fees and hassle of insufficient funds.