Bills happen. It would be nice to have fewer bills, but they’re an ongoing reality and they need to be.
Historically, paying bills meant mailing a check back with the statement you received in the mail. For many owners, writing checks to pay bills gives them a sense of control and visibility to what’s happening.
Nowadays, with credit card rewards programs, practices can get cash back or points towards travel, a nice benefit of just paying your bills. However, some fees may apply.
Old School Is Not Better
There are several problems with writing checks: they are time-consuming, they introduce fraud risk with limited recourse, and they are harder to account for than credit card transactions.
Owners and staff are often content to trade time for a sense of security. Putting aside the value of time spent on other activities for the practice, checks introduce risks that aren’t easily dealt with.
Concretely, we’ve had (at least) two practices suffer check-washing incidents in the past six months. Check-washing is when someone changes the original payee and/or amount on a check to steal from a practice.
Fraud on your checking account is not the same as credit card fraud. Dealing with someone using your account and routing numbers from a paper check is much more challenging than dealing with credit card fraud.
In addition, when you use checks—whether you do your own bookkeeping or outsource it to an optometry bookkeeping service—they are much harder to account for than transactions that come into your bank feed via credit cards or (more on this later) EFTs.
Credit Cards Aren’t Perfect Either
Credit cards, while preferable to checks, do carry some risks. First, the vendors you pay with a credit card bear the same transaction fees you do when you accept your patients’ credit cards. And sometimes they pass those fees onto you.
You won’t have to do a lot of math to realize that paying a 3% surcharge is more expensive than earning cash back or points. And with credit cards, you must be financially disciplined and pay off credit cards each month. Whatever benefits credit cards confer via travel points or cash back, the interest rate on carried balances will destroy that math.
From a security perspective, it’s much easier to reverse fraudulent charges on a credit card than a banking account. If you pay your balance off each month and a vendor doesn’t have a surcharge for paying with a credit card, use the card.
Speed and Security
The bottom line is that paper checks are time-consuming and an antiquated means of payment. If you don’t want to use a business credit card because vendors impose a surcharge on credit card payments, set up an Electronic Funds Transfer (EFT) wherever possible.
EFTs are faster to clear your bank and vastly more secure than sending paper checks in the mail. When they clear your bank and accounting software, the business they are paid to is automatically captured in the feed.
If you’re struggling to get your arms around your practice finances or feel like there’s got to be a better way, contact us to find out how Books & Benchmarks can simplify and automate your financial reporting while also coaching you on the best practices to manage your finances simply and securely.
