Why voided checks are useful for businesses
Technology has had a profound impact on every aspect of business, and is the cornerstone of the Fourth Industrial Revolution. In particular, digitization has transformed payment processes, allowing businesses to make financial transactions instantly and securely from desktop or mobile devices. Yet for US businesses, finance is not entirely paper-free. Check payments might have been largely phased out, but voided checks still have an important role to play for both large and small US businesses.
What is a voided check?
A voided check is a physical check that has “VOID” written across it so that it cannot be used for transferring fund from the associated bank account. You might think that voiding a check is only done when you have made a mistake in filling out the fields when writing a check. But on the contrary, voided checks have several other purposes in a business setting. We will look at some of those in a moment, but first, there is the question of how businesses go about obtaining a voided check in the age of online banking and paper-free accounts.
Creating a voided check without a check book
Today, many US business accounts do not come with check books. But business owners or finance managers can still create a voided check in minutes by visiting the VoidedCheck website. This is an online service that can create a voided check in a matter of minutes that can be either downloaded and printed or sent by secure email directly to the recipient.
The voided check generator can be used regardless of where you do your business banking. It is compatible with more than 5,000 US banks and credit unions. It can also be accessed from a mobile device, meaning business owners and finance managers can create a voided check whenever and wherever they need to, as long as they have the company bank account details to hand.
Why businesses need voided checks
There are several reasons a US business might use a voided check. These include the following:
- Bank account verification for direct deposits and payments – When a business sets up an account with a supplier, it will need to provide a voided check to give the necessary account information. This ensures that funds are transferred without error.
- Establishing client accounts – voided checks can also be instrumental in receiving funds from clients. Providing a voided check ensures the client has the necessary information to set up the business in its own banking system.
- Payroll verification – businesses often request a voided check from employees as part of their payroll process. As well as providing their bank details for salary purposes, the voided check serves as a useful way of verifying the employee’s identity. Note that the voided check generator mentioned earlier can be used by private individuals as well as businesses.
- Financial compliance – holding a voided check on file provides the necessary evidence to internal and external auditors that the business had legitimate access to the associated account.
- Eliminating the risk of manual errors – taking bank account details over the phone is fraught with risk. A voided check provides an extra level of safety, as it is a physical document that can be used to verify that the data entered is correct.
- Fraud prevention – a voided check cannot be used for financial transactions, but has all the information about your business account that anyone with a legitimate need might require. So it provides a valuable tool from a fraud prevention perspective.
Voided checks in the 21st century business world
Today, it is highly unusual for businesses to write checks or receive them as payments. Yet voided checks still have an important role to play in terms of account verification, financial compliance and fraud prevention.
In time, it is likely that voided checks will be phased out in favor of a digital alternative, as has happened in Western Europe, Japan and other major economies. But in the US, that day is still some years away. Check books might be passing into obsolescence, but online generators provide a secure and elegant way for businesses to continue to obtain voided checks for as long as they need to.