Checks are still a very popular method of payment.
Businesses rely on managing their accounts payables mostly with checks. Of course, there are electronic alternatives such as ACH, wire transfers, credit cards, and such. Personally, if I am on the vendor side I prefer to get a check for one simple reason. I don’t like to pay credit card fees. And I am willing to bet that no one who is reading this enjoys those fees.
Cash, Checks, and Other Representations of Tender
A check is very similar to cash. Even though “cash is king,” neither are fully void of risks; cash and checks can be counterfeit, a check is not a guarantee of funds. Hopefully, you only accept checks from customers you trust. This is just common sense. Fraud has been on the rise and its not only for checks. Crooks want to trick you out of money with anything possible including credit cards, checks, IRS schemes, gift cards, and the list can go on.
Recently we received a check from one of our customers and were surprised that it was handwritten. I mean it wasn’t a personal check, it was a check with a company name and everything but the amount and payee were handwritten. There was even a memo line in there to tell us how to apply it. Considering what we do for a living, it is always a surprise when we receive checks like this.
Why not print your own checks?
It’s not that difficult. Any Dynamics NAV, Business Central version, or other ERP & accounting software has this feature built-in, yet some still order preprinted checks, fill them out by hand, put them into an envelope, address the envelope, place a stamp on it and send it. I would think they only do this because maybe they only send a check once in a rare while, like once a month maybe. In that case, a handwritten check might be acceptable to them. It can come across a bit unbecoming of a business of a certain size.
Pre-printed vs. Printing your own
When a company does print their own checks, often they simply use a regular printer with preprinted checks, which are ordered from a vendor, and are specifically printed for you with your routing number, account number, and all that. This method creates a fully compliant representation of legal tender that can even be placed into an envelope that has a window saving you time and material on printing labels, printing directly onto the envelope, or even handwriting the recipient’s address. It should be noted that all preprinted checks are NOT just printed with regular toner. You may have noticed the routing and account numbers at the bottom of your checks look a bit different than the font of the rest of the check. Not only is the font unique, but it is also printed with magnetically charged ink. Without this magnetically charged ink, check readers cannot read the account information. Learn more here https://www.federalreserve.gov/paymentsystems/regcc-faq-check21.htm#20.
What is MICR?
Magnetic ink character recognition code, known in short as MICR code, is a character-recognition technology used mainly by the banking industry to streamline the processing and clearance of cheques and other documents.
If this MICR line is not printed with that magnetically charged ink, your check may be considered out of compliance and returned to you. At least one of our customers experienced this situation. Payroll checks were returned, people didn’t get paid, fees were incurred on both sides – not a pretty situation.
The bottom line is – checks have to be printed with MICR printer and toner.
And if that wasn’t enough there are paper standards as well. Just like paper, currency would not be printed on just any paper, checks cannot be printed on any paper either. There are many different levels of check paper available to print on. Some contain more security features than others. Check out our selection available.
So, paper check stock will make your check unique and secure, meaning less chance that some fraudster will wash your check and add another zero. If your business has multiple bank accounts, and chances are you do have multiple bank accounts, do not buy pre-printed checks. There is just no reason to do it. Buy blank check stock and print your own checks. The same paper can be used for many different bank accounts. Some of our customers even run multiple companies and not having pre-printed checks makes printing checks so much easier.
Now let’s get to printers. Just like currency cannot be printed with any ink, on any paper, it can’t be printed with any printer. You need a printer that is designed to print MICR. These printers have a special font embedded into them. Some printers also act as a safe to keep your check stock securely locked with an actual key.
How much is this going to set me back?
So if you’re serious about your business, be serious about your checks. If you print a lot of checks, print them securely, and if you don’t print a lot at least don’t handwrite business checks. Unless you’re a startup and just don’t want to spend money on software and checks and printer. But honestly, Business Central subscription is only $70 a month, and a fully capable MICR Check printer with ink and blank check stock can start off around $399.
You don’t need a lot of money to start printing secure checks. Not only you will be doing yourself a favor by printing secure checks that cannot be counterfeited, but you will also ensure that they get promptly accepted while making your business look legit.