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Canuck_2
Senior Contributor

Cheques, do you need them?

This article discusses the decining use of cheques and if we need tham any more.

 

I only print 3-4 a month any more and think I could get away with none if the charge for an email transfer was less or 0.

 

Do some email transfers at $1.50 cost to me but when you pay for the cheque, envelope, and stamp the transfer is less and it goes through immediately no need to take envelope to post box or the paper cheque to the bank.

I do recieve a couple payments by email and several businesses do automatic deposit.

 

Online banking allows me to make a lot of payments directly through my bank so no paper cheque needed and payment is next day (bank uses my money for 24 hours) so you can schedule payments to happen on due date.

 

Do we need paper cheques?

I don't think I do.

 

I see I failed to post a link, sorry about that

 

http://www.macleans.ca/economy/business/we-phased-out-the-penny-our-cheques-should-be-next/

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11 Replies
Husker-J
Senior Contributor

Re: Cheques, do you need them?

Short answer, YES, at least for now.

I do business with a few mom&pop businesses, that do not deal with credit cards, or wire transfers.   They want either cash or a check.  I pay by check, to have a record of payment.

I probably write 20 checks a month, but I will admit that I could probably cut that in half, if I really wanted to.

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BA Deere
Honored Advisor

Re: Cheques, do you need them?

I`m not technically savvy, but some businesses will take a check that you give `em and run it through a machine and give it right back to you..that`s all they need.  My bank has a deal where you take a picture of your check and text it to them and that deposits it 24/7.  Alot of expenses can have their bill taken automatically out of your checking account, I`m not ready to go there yet, sometimes I opperate a little too close to the bone and might get over-drawn  Smiley Happy

 

If they automatically take their bill out of your account monthly, what happens if there`s a mistake and your electric bill is $25,000 or something, it probably would be alot harder to untangle that knot if they already have your money  Smiley Happy

 

But yeah we don`t write many checks anymore, just one check to pay the credit card that has 50 items on it that all used to have required 50 checks.  Credit cards are safer because if it`s stlen you`re only on the hook for $50, where if someone gets ahold of your checkbook, they could drain your bank account...keep writing checking until the checkbook runs out of checks and you`re on the hook for all of it. 

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Kay/NC
Honored Advisor

Re: Cheques, do you need them?

I agree with both of the above. 

 

Some of the smaller, mostly local businesses don't take credit cards, but still run paper accounts and send a statement.  I am switching those that will take a credit card as fast as I can. 

 

 I have only farmowners, auto and health insurance payments auto-drafted.  That way, if I get hit by a bus, the place, the vehicles and our healthcare are still covered.  Autopay covers al the routine bills like cell phones, landlines, electricity, ISP, etc. 

The 943 and NC-5 for payroll are drafts, but have to be done on the keyboard monthly and quarterly, respectively.   

 

I did learn one trick the hard way:If you pay a lot of your service type accounts by credit card, have one dedicated to that function only, and never use it anywhere else, or get a subaccount in a nickname.  That way, when (it's not even an "IF" anymore), you dont' avhe to set up everything all over again.   Voice of experience speaking there....

 

As for other reasons to have checks:I still do for payroll.  Equipment purchases may exceed our credit card available balance.  Buying livestock.  Sending support to Mike's Mom.  Paying taxes, income and property.  Other types of insurance. Donations.  Paying for analyses at the state lab. 

Some conference registrations.   

 

I am sure there are others...any custom work, certain repair work.  I pay people in general by their preferred method, unless they have ticked me off by not creditting a past payment, and take a card...then I will use a card for spite, I guess.  Some things I buy with the card for buyer protections. 

 

I think checks and physical money have limited use, as more and more people become e-payers, -filers and -shoppers.  It tends to be more of the receiving end that determines which way it is for us. 

 

 

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Husker-J
Senior Contributor

Re: Cheques, do you need them?

Good idea on the separate card for the business.   Am thinking of getting a Cabela's card (HQed right here in Nebraska) and running the business through it.  They give rewards in store credit, which we can easily use up in clothing.  Cabela's has some of the BEST cold/wet weather clothing.  I like your idea of having some things on a separate card, so if it gets hacked, you still have either your personal card or business card that is safe, instead of screwing up everything.

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sw363535
Honored Advisor

Re: Cheques, do you need them?

Husker I have a smile for Cabela card..... One of my partners has one I do the accounting for..  

We live and farm on both sides of the Okla/Ks line and for a while every time we used the card in okla it got denied because our billing address for the card was Ks...   After a couple of months and several calls we finally got the right to use it in okla and got denied in Tx another 40 miles away..... EXcessive protection...... yet 

After a few months we recieved replacement cards in the mail..... activated and live for the use when mailed....

---------------

 

Checks,

 

The paper is getting old but my education is accounting and as much as I enjoy new technology and like to use it, I still recommend to establish as much of a paper trail as possible for those purchases you will someday have to defend.

I'll buy a ballgame ticket with my cell phone and show the image for the bar code and enjoy a meal with a credit card... But unless you trust that waitress I wouldn't give her the ability to access my bank account.... or the employee at any other business...

Something that creates delay and verification... like a credit card gives you an opportunity to challenge a wrongful charge when a debit card does not..

Just think what you will need to verify your tax deductions, ownership of assets, etc .... and make sure it is in place... a canceled check is hard to beat.

 

The only thing I don't like about the total absense of checks is that often there is a total absense of spending records, especially in personal accounts....  the Report technology is usually available from the bank but if ease of use is the driving force, often detailed records are too much of a hastle...

 

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Jim Meade / Iowa City
Senior Advisor

Re: Cheques, do you need them?

I still use checks much like many of the other comments state.  I do a lot of money transfers via bank check which costs me nothing.  I use credit cards for internat purchases and convenicne away from home.  Hand written checks are only with a few businesses and then during some seasons.  My farm machinery dealer works with checks, so in spring and fall I'm writing some.

 

I, too, like to be able to reach in and stop a transaction that is not right.

 

More and more, I'm paying with cash for smaller items.  It's no one's business which cafe I eat in or movie I see or so forth.  I keep receipts and enter the books daily so I'm not worried about the IRS.

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Canuck_2
Senior Contributor

Re: Cheques, do you need them?

sw  Interested in your take on reciepts.

When I pay an account online I mark the date and the confirmation # provided by the bank when I make the payment.

The amount will then show in my monthly bank statement and will agree with my paper record.

 

Is this good enough for an audit?

 

When I do an email payment (those are for small businesses that do not have ability for me to pay online through my bank) I again have a confirmation number which is recorded by me on the   account statement with the date.

This will cross reference with the email notice that the bank sends me when the payee accepts the payment into their bank.

The email notices I keep in a separate folder also and the totals on my atatement and my hand notation on it will agree with the monthly statment from the bank.

 

May not all be paper but should be enough of a track record?

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Canuck_2
Senior Contributor

Re: Cheques, do you need them?

Just went back and looked at number of cheques issued each month for past 6.

1 month was 4 and rest were 2 or 3.

These were to small businesses and I am gradually persuading them to try email transfer as the cost at $1.50 is cheaper than the cheque 70 cents, window envelope 10 cents and postage 82 cents AND no printer costs or trip to the mail box or to buy stamps, envelopes or cheques.

Not sure what the ink costs per cheque but those cartridges are not cheap.

 

Kay the dedicated business card is a good idea.

We happened on that without thinking of your reasoning because we go for the cards with cash back and we were maxing out the rewards by June so got a second card for personal use.

 

We do use auto pay for a few priveledged businesses but retain control over others by paying online because we do not trust them to fix a mistake quickly enough.

 

Online payments work great as I do the payment as soon as the bill comes in and I have a moment but set the payment to be made 'just in time' on the day it is due.

No need to mail it early to make sure it gets there and if I am busy on due date the payment still happens.

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Canuck_2
Senior Contributor

Re: Cheques, do you need them?

Jim

I think all my machinery dealers use a dedicated credit card which gives me up to an extra 30 or so days to pay and 1 payment for several dealers.

 

I happen to be in the middle of nowhere when it comes to the most machinery parts I need so deal in 3 different dealers depending which direction travel might ake me as distance is nearly identical to all 3.

I then get one statement which includes all purchases and even includes another dealer of a different colour too.

 

Yes I keep reciepts for all purchases including credit cards and the only draw back is pulling the credit card statment apart to allocate expense to correct category.

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