There may be times when you have made deposits and you are counting on a certain sum of money being available for bills, payrolls, etc. This is especially prevalent when a company is just starting out.
Even with today's quicker processing of checks, your bank may consider some of the checks you have deposited as "uncollected" funds. This may be because of the size of the check or where it is drawn.
It is a prudent practice to know your bank's policy on uncollected funds. This can prevent a problem of one your checks not being honored because not all the checks you deposited have cleared the other person's or company's account.
Some basic guidelines to practice are:
- Call your bank or access your on line account to verify your available balance.
- Make your deposits daily.
- Pay bills one day a week and be consistent with that practice.
- Pay by credit card if offered by your vendor, utility, phone company, etc.
One method to speed up your cash flow and avoid possible uncollected funds issues is to offer the availability of payment by credit card to your customers. While there is a fee involved, in the long run it will pay for itself. The fee is negotiable and usually if your credit card business is with your bank the fee will be less than with another financial institution. Your accounting professional can also assist you with this.
Related information on the Bane-Clene web site:
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The Bane-Clene® Team.