Time to Stop Paying By Check?
Many of us used to routinely write checks to pay our bills, but with new technologies and the emergence of more efficient ways to pay, people are using checks less often. While they can still be the right choice in certain situations, there are several reasons we at BookWerksTM bookkeeping company discourage relying on checks as your main payment method.
Here’s why you should consider NOT USING checks
1. Inconvenience and Delays
Using checks can be time-consuming and inconvenient. Writing a check requires a pen, a checkbook and a stable writing surface. If you are mailing the check, you need a stamp and a secure mailbox. Plus, the people you write checks to have to wait to get their money—first depositing or cashing your check, then waiting for it to clear (not the best way to win friends or clients, or business partners). Electronic payment methods like credit/debit cards or digital wallets cut the wait out of the process for everyone.
2. Risk of Fraud and Identity Theft
Paper checks contain sensitive information like your account number, routing number and signature. If a check falls into the wrong hands, these details can be exploited. Checks can be easily altered or forged, making them an easy target for scammers. A recent rash of checks being taken out of blue mailboxes and then altered has many of us taking the extra (time-consuming) step of taking mail containing money to the slot inside the post office. Electronic payments are more secure. They use encryption and two-factor authentication to protect payers.
3. Potential for Errors
You can easily make mistakes when writing checks by hand. Simple mistakes such as wrong amounts, wrong dates or forgetting to sign can cause payment delays or complications. You can find yourself facing bank fees or the hassle of writing ANOTHER check. Electronic payment systems often have built-in features that prevent errors and provide automated validation for more accuracy.
4. Lack of Tracking and Record-Keeping
Keeping track of payments made by check can be a chore left undone when we get busy. Even when you keep a copy of each check you write, it is easy to lose track of them. Without a reliable system for organizing and retrieving check records (such as outsourcing your bookkeeping if you own a small business), it can be difficult to maintain accurate financial records. Electronic payments leave a digital trail, making it easier to track and manage your payment history.
5. Higher Costs
Checks can be more costly than paying electronically. Banks usually charge to order checkbooks, and some even charge fees for processing checks and placing stop payments. Many electronic payment options are either free or have minimal fees. When you’re managing your personal or small business expenses, these small fees can add up. Switching to an electronic option can save you money, time and hassle.
6. Reduced Acceptance
Fewer places are taking checks as payment these days. Many businesses, especially in retail, no longer accept checks because of the risks and inconveniences. When you’re prepared to pay with debit, credit, or another electronic option, you increase your chances of a successful transaction.
When to Use Checks (HINT: Never!)
There are only a few instances when our professional bookkeepers might recommend using a check, primarily paying your taxes in person at your local municipality. But in most situations, we find our clients like streamlining their financial transactions by phasing out checks. ACH, credit cards, wire and bank transfers, digital wallets, your bank’s Bill Pay system, and mobile pay are all faster and more convenient than sitting down and writing a check. And more so, safer!
Most creditors have easy and secure online payment options, and the number of private electronic offerings keeps growing, too. Many options are now available, such as Venmo, Zelle, PayPal, Amazon Pay, Google Pay, Apple Pay, and Stripe. When it comes down to it, the trend is clear: in most instances, you’re safe leaving your checkbook at home, as long as you have a credit card, or electronic method of payment on hand.