Accepting Checks in Your Business Virtually Risk Free

Most businesses accept checks as form of payment for goods and services. However, accepting checks can be a risky endeavor if your company doesn't follow good policies and procedures for preventing loss from bad checks. In fact, the reason some businesses do not accept checks is because of a history excessive "bad checks" that costs their business to much money and aggravation, preferring to accept only cash and credit cards. Whether a business currently accepts checks or not, they can minimize the cost of accepting checks to less than 1%, which is less than half the 2% to 3% cost of credit card processing. The only payment method cheaper is accepting cash.

Outlined below are tips for formulating your virtually risk free policies and procedures for accepting checks. For the purposes of this article, "virtually risk free" is defined as achieving a cost to accept checks of 1% or less. Not all items will apply to all businesses but if you determine that accepting checks in your business is "high-risk", a more stringent program using more of these tips is needed. In any case, your policy needs to be in writing, distributed to all employees, and followed without exception.

1. Clearly defines acceptable forms of ID, required information and dollar limits. Post these requirements where customers can see them at the point of sale.

2. The check-writer's name and address should be pre-printed on the check. Ask for and write the phone number if it is not pre-printed on the check.

3. Make sure the written and numeral amounts correspond.

4. Watch the check-writer sign the check. If the name is illegible, have the customer print the name below.

5. Compare the signatures, photo and physical description from the ID with that of the check writer.

6. Verify that the ID is still valid! Check the driver's license for signs of alteration or modification.

7. Most returned checks have low check numbers (100 to 500), which indicates a new account and therefore a more risky check, particularly for business or "dba" (doing business as) checks. Do not accept starter checks. Any number under 300 should be a "red flag" and require a manager's approval for acceptance

8. Never take business checks from individuals unless you know the business and the individual. Business checks are not presently eligible for electronic re-presentment. With available software, virtually anyone can produce a business check.

9. Do not accept checks with PO boxes?always get a street address for the check-writer.

10. Do not accept third party checks.

11. The four-digits following the magnetic ink character recognition (MICR) number at the bottom of the check should match the four-digit number at the top right hand of the check.

12. All checks, except government checks, should have a perforation along one side of the check.

13. Use a check verifications system. This form of protection should significantly reduce the volume of "less collectable" checks (those passed by check-writer's with a history of passing bad checks).

14. Have a camera at the point of sale. Forgery, fraud and bad check-writers do not want their picture taken. A video camera conspicuously placed will deter most dishonest people.

15. Utilize a free check collection service for the fastest collection of those checks that do bounce to maximize.

Using a check collection service is critical to minimizing your costs. On average, 2 out of every 100 checks are going to bounce, when that happens, time is of the essence to recovering your money. Check collection services have the tools and expertise to collect on bad checks quickly, over 80% of the time for top providers, and their services are usually free to businesses as they make their income from collections fees allowed by each state.

When choosing a service, choose a free service and avoid the companies who offer "guaranteed" collections for a fee. The fee charged for the guarantee ends up being substantially more expensive than implementing a good check acceptance policy in conjunction with a reputable, free collection service. Also, choose a company with a good reputation for customer service. It is beneficial to know that your service provider will work with you when a special circumstances need to be considered for a particular collection. Finally, expect to maintain full control of your checks. Only hire a service that guarantees to return your checks to you at any time in the collections process.

CybrCollect is a free check collections service that meets these requirements and more. I recommend CybrCollect because:

1. Free service to businesses

2. Excellent Customer Service

3. Clients maintain full control of their checks

4. Best collections rate in the industry, over 80% of NSF checks collected within 30 days

5. Industry leading client website for 24/7 access to collections information

6. Exclusive "Executive Analysis Report" for determining true cost of accepting checks.

Marc Eskew is widely recognized in the area of accounts receivable management. For more information on optimizing your cash flow, the CybrCollect program, or to contact Mr. Eskew, please visit http://www.fmxservices.com/cashflow

---

Fleet Washing Operations Manual Sample Outline

In the Truck Washing Business every single type of vehicle... Read More

Image of Your Franchise Automotive Outlet is So Important

Image of your franchise automotive outlet is so important. Some... Read More

Mobile Detailing Environmental Concern in the Deep South

Macon, GA goes after garage-gas station conversion detail/hand car washes... Read More

Marketing Your Small Business - The Top 10 Brilliant Ideas

A Brilliant Marketing Idea... sounds great but what is it?... Read More

Window Cleaning Business Case Study

How do window cleaning franchise businesses start? It is a... Read More

9 Things You Must Do To Maximize Your Chances Of Obtaining A Small Business Loan

To get approval for your small business loan application, you... Read More

Becoming Recession Proof

A lot of business owners I've spoken with lately have... Read More

How to Wash Mobile Homes as a Business

Washing manufactured homes, mobile homes, can be a lucrative and... Read More

Accepting Checks in Your Business Virtually Risk Free

Most businesses accept checks as form of payment for goods... Read More

Tips For Successful Home Show Businesses

Opportunities for home show businesses have never been more abundant.... Read More

There Are No Dumb Business Questions, Not!

Q: I'm curious. What is the dumbest business question you've... Read More

Pressure Washer Concrete Cleaning Equipment

Cleaning concrete is tough and there is an easy way... Read More

A Key to Success: Be Consistent

Over the years I heard the best way to learn... Read More

How to Get Maximum Results With Minimum Effort

Get maximum results with minimum effort. Sounds great doesn't it?... Read More

Dont Let Your Small Business Fall in the FDCPA Trap

When someone owes your small business money, you certainly feel... Read More

Mobile Car Washes and Shoe Policies

Mobile carwashing is hard work, it is tough on the... Read More

11 Things Small Business Owners Can Learn From Tiger

1. There Are No "gimmes" ? They count two-foot putts... Read More

Hiring A Virtual Assistant Can Help Your Business Grow

Are you a home or small business owner and you're... Read More

Incorporating a Small Business: S corporations versus C corporations

If you've been considering incorporating your small business, you've probably... Read More

Quality Controls for Franchising Companies Sample Outline

Quality control in franchising companies is paramount and all franchising... Read More

Effective Customer Interviews Make Life Much Easier!

One of the critical success factors for service-related businesses is... Read More

Freelance Tips: How to Cope with Spring Fever When Theres Work to Be Done

We all know how glorious those first warm days of... Read More

Do I Have to Do EVERYTHING Myself?!

The air in my client's office nearly crackled with her... Read More

A Day in the Life of a Self Employed Professional

It's Monday morning and Connie the Consultant sits in her... Read More

Starting a Small Business? ?Tips from a Veteran

Congratulations, you are starting a small business! You are taking... Read More

The Game Plan ? The Difference Between Small Business Success And Failure

It is an American dream to own a business. But... Read More

Will Adding a Car Wash to Your Fast Lube Add Additional Crime to Your Facilities?

Car Wash Crime in the Hood. Apparently not everyone is... Read More

Buy a Flower Shop: Serious Considerations

You've always liked flowers and you think the idea of... Read More

Franchisor Prospect Checklist Sample Form

Due to the over regulation in the Franchising Industry and... Read More

Mobile Truck Washing, Case Study

Most folks in the pressure washing business are happier to... Read More

Using Technology to Manage Customer Loyalty

Don't let your customer satisfaction research initiative collect dust on... Read More

7 Reasons To Take Control Of Your Small Business? Checking Needs

Business checks are available in many styles and varieties. They... Read More

Small Business Strategies - Four Critical Success Factors

Scenario OneDuring a recent presentation, a business owner was given... Read More