Although the electronic age has changed many ways that individuals and businesses handle their finances, the foundation for accounts and banking has still remained intact. The biggest difference is that electronic data has taken the place of physical pieces of paper, although the manner in which the transfer functions is just a simplified version of manual payment.
This greatly applies to the use of e-checks, or just processing paper checks electronically, and the system that a business uses in order to complete the transaction can affect productivity and efficiency in accounting. One thing that we have found at National Processing is that many businesses assume that because a check transfer is done digitally, it is automatically secure. Since it is only the manner in which the information is transmitted that has changed, merchants will still want to make sure that proper account verifications are in place in order to avoid non-payments.
Traditionally, processing a check will initially ensure that account and routing numbers are valid. Once this information is verified, then the actual transfer of funds does not take place until the check is deposited and the conferring banks reconcile the financial transaction. This lag time is what often leads to the occurrence of bounced checks, whether it is the result of intentional fraud or through honest account discrepancies. The conclusion in either case, however, is equally detrimental to both the merchant and the customer.
Having the proper system for accepting checks electronically allows for merchants to operate with less or even no lag time. This can be used in a physical place of business or with online operations. It also allows for customers to keep better records on their end, since the verification is of actual funds and not projected amounts.
An accurate and efficient check cashing system can run the account transfer in real time. Although the information which allows this to happen is still the same, the functionality of the system is what enables the account balances to reflect what is happening at the time of the transaction. This will help to eliminate lag time costs, and also alert financial backers to possible discrepancies. By operating in present tense, both merchants and consumers will come ahead.