Business and personal checks are very similar, yet they have some major differences. A business check is issued from a business checking account, while a personal check is written from your account. While they share a similar information structure, business checks are often more expensive than personal checks.
Business Checks
A business checking account is used to issue business checks, and this account is usually used for payroll, insurance, utilities, and stock purchase expenses. This allows the business to be a legal entity separate from the owner’s finances. Using this type of account also helps you keep track of your business’s finances and avoid mistakes when filing your taxes.
The type of account you choose for your business will depend on your needs. For example, you may want to use a basic business checking account, which is free. It is important to choose the account with the lowest fee structure. It would help if you also looked for one that offers payment card acceptance. This will make it easier for customers to make payments and for businesses to get paid.
Personal Checks
Personal checks are a type of check that is written from your checking account. They contain a payee’s name, account number, and the amount of money you want to send to a specific person. Personal checks are a safe way to send money because the money can only be cashed by the person or organization you want to pay. Personal checks are also used when businesses do not accept credit cards or cash payments.
While personal checks may look like simple bills, some issues may arise if you do business with them. They are unsecured, so if the payee does not have enough money in their account when they write a check, it will bounce. In addition, if your payee cashes a check with insufficient funds, they could be charged an overdraft fee.
They Share The Same Basic Information
Business and personal checks share the same basic data, including the bank’s account numbers, routing numbers, the amount payable, and the signature line. The two types of checks can be cashed and deposited, but the main differences are in size, design, cost, and security features. Aside from their primary purpose, personal checks differ from business checks in size, cost, security features, and how they are used.
Cost
Business checks are more expensive than bank checks, but there are some ways to minimize your cost. One option is to create your custom checks. This process can cost as little as $5, depending on how many checks you need to process. Personal-style checks are also less expensive than business-style checks. They can be printed with your company logo, company name, or any other image you desire.
Another option is to use digital payment methods. In contrast, the processing costs for credit card payments are far less expensive than those of bank checks. In addition, these new payment methods are based on bank transfers and can cost very little per transaction.
They Require A Bank Account
Before you can cash business checks, you must have a bank account. Unfortunately, some banking institutions don’t allow business checks to be cashed, so you can only deposit them. However, if you’re the sole proprietor, you can designate your checking account with a DBA designation, which gives you the flexibility of cashing both business and personal checks.
While it’s true that you can use your checking account for business purposes, it is important to have a separate account for your business. This way, you can ensure that the funds in your business account are properly accounted for. A business account is important because it will provide the security and convenience you need for your business.
