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Protect Your Company from Bounced Checks
October 23, 2007
Small businesses need to accept personal checks to stay competitive, but bounced checks can cut heavily into a small business’s profit. Before you accept a check with the faith that the customer has money in their account to cover it—here are some steps to establishing a check-acceptance policy that could save your company a bundle.
- When accepting a check, always ask to see the customer’s driver’s license or similar identification card, preferably one with a photograph. Many businesses will not accept checks that don't have a customer's name preprinted on them.
- Check the customer’s physical characteristics against his identification.
- Ask for the customer’s home and work telephone numbers, so you can contact him in case the check bounces.
- To avoid accepting a forged or counterfeit check, evaluate the document carefully—authentic checks are perforated either on the top or left side of the check.
- Be especially cautious with new checks. A large majority of bad checks are written on new accounts.
- Make sure the last three digits of the Federal Reserve Number beneath the check number agree with the first three digits of the bank number at the bottom of the check.
- Check to see if there is a difference in or misalignment of type styles.
If your company processes a large volume of checks, consider getting electronic help from the services of a check-verification company.
Posted by Shanu Singh Guliani on October 23, 2007 | Comments (1)
