Although we live in a world where payments can be made electronically, there is still a need for paper checks. They remain relevant as they provide a paper trail, reduce risk, and help fill a need for both individuals and businesses. They are convenient to use and allow you to keep track of all your transactions.
paper trail
With paper checks, there’s a trail, so it’s easier to figure out what was spent and where it was cashed. That can be important when it comes to having records to verify that you made a payment. A photocopy of the check before you mail it, as well as one from the bank when you receive your statement showing that it was cashed, can help you keep good records.
For a company, it shows a level of professionalism. Paper checks often need the approval of more than one person, so there is an internal system of checks and balances for the business. Being able to send a check for accounts payable is important so you can build good business credit and stay on top of your cash flow. It also makes reconciling the books much easier.
Reduced risk
Criminals can get away with forging checks, but it’s significantly more difficult for them to obtain credit or debit card information. When they forge a check, they are often at risk of being caught due to the signature, where they try to cash it and be seen on video surveillance cameras. With your credit or debit card, they can do a lot of damage online and remain safe under a cloak of darkness.
flexibility
Not all companies are set up to accept your payment electronically. With paper checks, you can pay what you need and you don’t have to carry cash to do it. In addition, you are not left behind because the entity cannot use other payment sources to complete the transaction. Sometimes you may need to write a check to pay something, even though you know the funds won’t be available in that account for another day or two.
That kind of practice is not encouraged, but it happens. For example, you may have a deposit on Friday but know it won’t show up in your account until the following Monday. However, you have bills to pay or you need to do some shopping over the weekend. With this type of scenario, you can write a check and before it reaches your bank, the funds will be available.
check
When you pay for services, it’s a good idea to have a paper record to refer to. If you pay cash, there is no proof that you actually paid for those services. This can become a sticky situation if you’re not careful. For example, you may need to pay a deposit to rent an event room or even rent a house. You may be painting your house and they want a percentage of the funds up front. Writing a check shows that you paid those costs in case a problem arises. If the check was cashed, that can be your proof in a court of law.
save on fees
The amount of money they charge you when you go to the ATM is ridiculous! It may only be a few dollars at a time, but how much does it add up each month or year? Find a checking account provider with no service fees. You can also avoid higher fees like sending a cashier’s check or money order when you can use your own account for free.
stop payment
When you pay for something in cash or electronically, there is no way to stop the payment. You’re at the mercy of the recipient to pay you back, and that can become a time-consuming hassle. With a paper check, you can contact your bank and request that they stop payment. While there is often a fee that applies to this service, it will be less than the value of that check.
You may have had every intention of allowing that check to clear, but then something comes along that completely changes the situation. You can go directly to your banking institution and complete the stop payment process. This avoids problems trying to work everything out with the person who has that check. Even if they try to present it to the bank, it will be rejected.
Expense Record
Hopefully, you have a large budget for your household expenses. However, you may be wondering where much of your money is going. How much do you spend eating out or shopping? Where can you remove extras to add more to the savings? When you use paper checks, you can keep better records of all your spending. You’ll be able to accurately track where your money goes each month.
Proof of payment
In the event that you are contacted personally to report that you did not pay an invoice or if your company has outstanding accounts payable, the canceled check will be posted to your bank. They can provide you with a copy to show that creditor. It will verify that the account was paid, when it was collected and even who signed to collect it.