You are already familiar with checks since you have written and dispatched several of them. As an entrepreneur, there are things you do on a regular basis to keep your business running. If you supply products for profit, stocks must be sufficient. Telling your customers that an item they wanted is not available is a sure way of losing the client to a competitor. Have you ever wondered what that piece of paper you present at your bank portends? Why would a financial institution accept the bill and give you money in exchange?

How checks work
A check orders the bank that issued the document to pay a specified amount to the person named. The issuer must have an account where they keep their money. By writing the date, payee, amount and signing on the check, you order your bank to pay the amount stated. Banks recognize checks as instruments of trade or a mode of payment that eliminates the need for one to carry large sums of money. Moreover, both the issuer (drawer) and the one getting paid (payee) can be persons or entities.

Clearing process
All checks pass through a payment system that begins with the presentation of the bill to your bank. They then send it to the institution where the drawer has an account. The drawer’s bank confirms legitimacy and availability of funds to cover the amount indicated. If all goes well, the issuer’s bank releases the money. Depending on the bank in question and other procedures, the process can take a day or several days.

A typical check-writing cycle
From this background, we can revisit the check writing process. First, your bank issues you with a book containing numbered check leaves. Second, whenever you want to make a payment, you just write and tear off the document from the book. Before you do, you must also copy the information on a stub that also serves as a reference for the future. In some cases, you can also use a typewriter to write a check. Third, you give the trade instrument to the person you intend to pay.

Adopting technology
Going hi-tech with your payments process makes you more efficient than before. Besides, you save money that you used to incur on manual processes. Checksnextday can significantly reduce the turnaround time between purchases and payment. As a business person, your prime objective is to get the goods into your warehouse as fast as possible. After that, the team working for you strives to ensure that the finished product gets into the clients’ hands without delay. A manual check writing system can bog you down with inefficiency, errors or even fraud.

Most businesses still hold on to the manual way of handling checks. However, an insight into the process reveals lengthy procedures coupled with bottlenecks within rigid banking systems. By automating your payables cycle, you not only improve on efficiency, but you also seal all loopholes for fraud.