Handling Business Checks

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Question:

What is the recommended procedure for handling checks made payable to a business that are returned NSF? We currently make a bank official check made payable to the business when the funds become available.

Answer:

While I know that many banks permit the procedure you've described, I think a better process is to simply require that the check be deposited at the payee's bank and presented for payment through in-clearings. In that way, your bank obtains the warranty from the bank of deposit that the endorsement on the check is both genuine and authorized.

First published on BankersOnline.com 11/12/07