Bank finance articles and tips

Payment processing is a key part of every small business' operations, from local retail to business-to-business services. As most modern retail stores and restaurants have made the transition from cash and check payments to cash and credit card, check processing is still an issue from time to time. Should retail businesses accept checks? If they do, they face the hassle of depositing these checks along with the risk of accepting checks that may be backed by insufficient funds. Business to business companies, educational institutions, utility companies and many others routinely accept large volumes of checks, which greatly increases the risk of insufficient funds and time that must be spent processing these checks.

There are solutions for small business check processing, however, which can reduce and even eliminate these problems. Just as credit card merchant services are readily available to nearly any business, electronic check depositing and check processing are services which nearly any business can use to cut back financial risks and time spent processing checks.

DIY Remote Check Depositing

Remote check depositing makes accepting payment through checks very similar to the process of accepting credit card payments. Merchants use a check image scanner, which is connected to a PC, to scan and instantly send the check's data (MICR data specifically) through an internet connection. In this way, checks are instantly authorized and deposited at the time of the transaction. Small business owners can easily equip their shops and offices to remotely process checks via a simple software installation.

Retail Check Processing

A simpler form of check authorization and processing is available specifically for retail shop owners. Very similar to credit card transactions, electronic check processing for retail shops allow checks to be verified and authorized over the phone, through credit card terminals or through the internet. Retail check processing can easily be made to include remote check depositing with the purchase of a check scanner and scanning software.

No More Trips to the Bank

For many small businesses with equally small budgets, every labor hour spent needs to count. Having employees make trips to the bank to deposit check payments leeches valuable labor hours away from a business; if the business owner is performing these duties, then his or her time is not being used to its best potential. By eliminating the need to go to the bank to receive payment for goods or services, electronic check depositing helps small businesses run more efficiently.

Reducing Risk for Merchants

Many small businesses refuse to accept checks because they have been burned too many times with customers' checks that have bounced. Refusing to accept checks can, on the other hand, turn away potential business. Merchants who use electronic check processing can rely on instant check authorization to eliminate the risk of insufficient funds, allowing customers a wider range of payment options with little or no risk.

Jeff Dodson is the owner of Dodson Group, a business supply vendor specializing in car dealership supplies and merchant payment solutions. Based in Grand Rapids, Michigan, Dodson Group has worked with area auto dealers and businesses to increase sales and lower costs with targeted marketing strategies and competitively-priced supplies. Learn more about Dodson Group at Dodson-Group.com, or browse their auto dealer supply catalog.

By Marjorie Steele
Co-Author: Jeff Dodson