Checks aren’t always the first choice for business expenses but they do have some benefits.
There are many ways to pay for business expenses – from direct debit and credit card to cash and check. As technology has taken over many industries, when it comes to spending money, checks aren’t always the first choice, but they do bring with them many benefits.
We’re going to delve deeper into the world of the checkbook and weigh up the pros and cons of using this slip of paper.
Let’s start with the pros:
Check are safer
A check can’t be cashed by just anyone, which is why – for a thief – checks aren’t a great thing to steal. Checks are traceable, meaning they’re a safe option when making payments. You know who the check is going to and whose bank it is expected to be cashed in.
This is thanks to all of the required information being written on the cheque and the underlying copy you keep for your records. As well as basic checks, you can even get some with advanced security measures in place, including:
- A heat-sensitive icon to prevent photocopying
- A hologram which makes reproducing checks virtually impossible
- A watermark to protect against forgery and counterfeiting
- A security coating which blocks tampering with the check information.
You have a paper trail
Thanks to checks being a hard document, there is a paper trail. This paper trail allows you to see what was spent and where it was cashed.
This comes in handy when you need to verify payments, update your records and file your taxes. Overall, checks are great for keeping your documents and records in order.
Greater flexibility for payments
Not everyone can accept electronic payments. While some see cash as an easy option, going back to our last two points, checks are a safer way to pay – and are just as easy as paying cash. Be sure who or where you’re paying your check to accept them first, though.
There aren’t many great things that come without some cons, and checks bring with them their own downfalls. Let’s take a look at some of the cons that come with paying with your checkbook.
Not the most convenient
Let’s be honest, while checks aren’t the most difficult of things to complete there are more convenient ways to pay. You need to assign time to fill them out and then it also takes time for it to clear (around two to five business days). This isn’t ideal if someone is wanting immediate payment.
Checks can be refused
We suppose this could come under the ‘convenient’ section, but a pretty big con of checks is that not everywhere or everyone accepts them. As we mentioned previously, checks aren’t an immediate payment, they take time to clear, which means some might not wish to accept them.
All businesses are required to accept legal tender, but as checks are not a legal tender, they can be declined.
Ensure you have the finances
Organization is essential when it comes to paying by check. You need to ensure that the funds will be in your account at the right time.
Take into account clearing time and the funds available at that moment to ensure who you’re paying receives the money – or it could result in the check bouncing.
Checks bring with them some vital benefits. But you should really consider the pros and cons of using checks for business expenses before you start signing.