Do I Need Personal Cheques or Business Cheques?
Cheques, either of the personal or business variety, have been a preferred payment method for a long time. Though there are questions about their continued use as a means of payment in the face ofadvancements in the digital payment space, they are still a force to be reckoned with, and it is safe to say they will be viable for many years to come.
Do you, however, have a clear understanding of business and personal cheques, and do you know when to use each type? Continue reading for more insights about the difference between the two so that you can understand when to use one instead of the other.
Business Cheques Vs. Personal Cheques
Business cheques, as the name suggests, are primarily for making business-related payments. They are mostly related to business checking accounts. With them, you get to write your checks against your company’s assets and not against your personal possessions. Personal cheques, on the other hand, are designed for personal use. They are usually connected to your personal bank account.
When Do You Need Business Cheques?
It is generally recommended that if you are running a business, you need to maintain separate checking accounts for your business and personal finances. As a business owner, it is financially prudent to maintain a dedicated business account.
This will simplify the accounting process, in addition to helping establish the business as a separate entity. With such organization in business finances, you leave no chance for your creditors to come for your personal property in case you fail to meet some of your financial obligations.
Additionally, writing cheques from your business account comes with certain benefits when it comes to filing tax returns. For example, your business may benefit from tax deductions by simply maintaining its own checking account.
When do you need personal cheques?
As observed earlier on, personal cheques are for personal use, though they may also be used when the payee requests that they be paid using personal cheques. There are some small businesses that won’t accept credit or debit cards, and some will not accept cash payment if the amount exceeds a certain value. In such cases, personalized cheques may be the best mode of meeting your payment obligations.
Similarities between personal and business cheques
There are certain obvious similarities between personal cheques and business cheques. Most financial institutions will allow you to cash or deposit either. Secondly, they contain the same basic information. In addition to having a bank routing number, every cheque will have a date, the name of the payee, the amount to be paid, and a signature line.
Differences between personal and business cheques
Here is a brief overview of some of the differences between business and personal cheques-:
The Size
Business cheques are normally larger than personal cheques, with the typical size being 8 x 3 to 5 inches, while personal cheques are usually about 5 to 6 x 2 inches in size.
The large size of business cheques makes them easy to print should you choose to print your cheques in-house. One of the reasons for the small size of personal cheques is to make it easy for users to carry them in pouches and wallets.
Design and Branding
The look in business cheques is usually professional, and they have room for proper business branding. In most cases, a business cheque will have the name of the company, the business logo, and the address among other formal information.
Personal cheques, on the other hand, are artsier and less professional. Their appearance mainly depends on what the owner desires to have on the cheque. They are designed to display personality instead of professionalism.
With business cheques, the details of the payee are usually filled out on the computer before being printed to give a more professional look.
With personal cheques, however, the payee’s details are usually handwritten. The only handwriting you may see on the business cheque is the signature of the person making the payment.
Also, with personal cheques, it is common to leave out details such as the name of the payee, the amount to be paid, the date, and the account details to be filled by the payee when they are ready to cash the cheque.
Security
Both business cheques and personal cheques are fairly secure. The standard protection of most cheques will include a warning box, a security screen, a chemical sensitive paper, a padlock icon, a microprint signature line, and erasure protection.
Business cheques, however, come with additional security features such as bleed-through numbering, custom-designed signature lines, authentic and artificial watermarks, step-and-repeat pantograph, thermochromic ink, and warning bands.
Why Use Business Cheques Over Personal Cheques for Making Payments
Though you can use either type of cheque to make payments, there are certain benefits that come with keeping your business and personal checking accounts separate. Some of the reasons include the following-:
Professional Credibility
Business cheques come with a professional appearance that you won’t find with personal cheques. Whenever you make payments with a business cheque, you appear to be more trusted, and the payees are likely to view you as a more credible person to do business with.
Enhanced Security
The enhanced security features of business cheques will provide you with peace of mind in the knowledge that they won’t be susceptible to fraudulent interceptions. Besides, they will also meet or exceed most of the financial industry and banking processing standards.
Makes Work Easy During Tax Time
Business cheques will not only help you keep your finances organized, but they will also make tax-filing relatively easy. They will provide a clear distinction between personal and business expenses, and they may earn you tax deductions that may help to lower the tax burden on your business.
Recent Posts
-
QuickBooks Cheques: Types, Benefits & Where to Print
QuickBooks has been a real game-changer for businesses of all kinds. Irrespective of the size or the
-
Do I Need Personal Cheques or Business Cheques?
Cheques, either of the personal or business variety, have been a preferred payment method for a long
-
Why Personal Cheques Are Still Being Used
Credit and debit cards may be the most popular modes of payment in the present times, but this is no