Types of Bank Checks
Bank checks are drafts written against a business checking account. Simple as that. However, this draft is based on the company’s deposits and not the business owners. This makes a very clear definition of personal and company assets.
There are specific requirements when it comes to opening a company checking account and it is almost a necessity to use a business account to write checks to pay bills and purchase goods.
But, for a business to open an account, there are requirements made by the bank in which the account will be opened, including:
• A copy of the filing documents for the business.
• Social security number if sole proprietor is going to use a fictitious name and having it filed through the county clerk.
• For corporations: Articles of incorporation
• Board of Directors
• Minutes of meeting authorizing signers on the account
• Tax identification number
• Minimum balance that may put a limit on the number transactions per month.
There are various types of bank checks:
• Check drawn on a general ledger: good to pay suppliers and/or services which will relate to the daily operation of the business
• Payroll Check: This check is used specifically for payroll and if there is a payroll company involved, that company will use the payroll checking account. This is usually funded by the general operations account.
• Dual signature checks: This is a check that will protect the business from an unauthorized person writing a check. It requires two parties to sign every check or it will be invalid. The authorized personnel must be indicated in the minutes and added to the signatory information.
• Post-Dated Checks: You can easily take care of vendor payments with post-dated checks. This helps your business get established and shows the vendor that you are a good account and consistent.
Bank checks are available at the institution you use or can be ordered and designed specifically for your needs and/or profession. There is specific information that will be needed if you prefer to order your checks from a discount provider including:
• Name, address and telephone number of your business
• Bank account number
• Bank routing number
• Name, address and telephone number of your local financial institution
When ordering your bank checks from your financial institution, your bank usually provides all the above information for temporary checks and the company checks that are ordered at the time you open your account.
Today we have the option of walking into our local financial institution or going on line to open an account, keeping in mind that you would still have to hand deliver some of the paperwork in order to authenticate your business standing.
However, walking into your local bank to set your checking account up in person is highly recommend because it provides the opportunity to begin a banking and professional relationship with your bank. Having this kind of relationship is an advantage in the future in case there is a need of a loan or line of credit.
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