Do you receive a lot of checks?
It can be costly and time consuming to process customer checks. Yes, it seems odd that receiving checks–payments–can be costly, but think of the time spent (wasted) by receiving the checks, posting the checks to your accounting system, creating a deposit slip, delivering the checks to your bank, and then waiting on the checks to actually clear the banking system. This spent time represents not only a real monetary cost but also an opportunity cost, regardless of who actually handles the task of processing and depositing checks.
Well, there is a fairly new method of processing checks, and it is already an available function in the most popular accounting systems including Quickbooks. Thanks to the Check 21 Act, recipients of paper checks are now entitled to convert the paper checks into digital copies, or a “substitute check.” You already see the results of this Act when you see digital copies of checks on your bank statements in lieu of receiving back the canceled checks.
Through inexpensive subscription services, and the purchase of a scanner (ideally a check scanner, though some standard tabletop scanners suffice), you can electronically process the very checks you currently deliver to your bank as a deposit. Basically, you scan the checks using special software (or, in some cases, your accounting software–such as the case with Quickbooks). The software automatically detects the checks’ routing and account numbers and payment amounts, and sends the resulting deposit to your bank.
So what are the realized benefits?
- Less time spent processing checks and making deposits
- Lower likelihood of depositing a customer or vendor’s “bad” check (read: non-sufficient funds)
- No need to make copies of received checks for your records; the software keeps electronic copies of all checks
- Quicker funds availability