As more bookkeeping tasks become automated with cloud technology, it’s easy to think all processes are becoming increasingly efficient and practical. Automating data entry with data capture software, for example, helps bookkeepers save countless hours each month.
Technology has helped accountants and bookkeepers ditch paper bank statements, receipts, and invoices, and streamline document management. Yet, one key type of source document remains tricky to manage: checks!
Despite efforts to create automated and paperless accounting processes, North American businesses still write billions of checks each year. With that in mind, most bookkeepers are still required to keep track of checks for their small business clients. If clients aren’t keeping detailed check stubs (and passing those stubs to you!), or don’t provide access to their online check images, managing checks can be challenging during reconciliation and month-end close.
Why are checks so difficult to manage?
Trying to reconcile a client’s books can be difficult if they rely on checks for their accounts payable processes. Even if they are diligent about sending you their bank feed/statement, or you are collecting statements automatically (using a document collection solution such as Hubdoc), you will likely lack the data necessary to reconcile properly.
If your clients pay with checks but don’t give you detailed check stubs or books, you’re left to play guessing games when coding transactions during bank reconciliation – i.e., “Check 4731 - $500” might be a familiar (and frustrating!) sight to you.
For this reason, getting check images from your clients is highly beneficial to your reconciliation process – but it’s not always so easy. You’ll either have to rely on the client to send these to you on a regular basis, or you’ll need to be granted read-only access to their bank accounts (as sharing login information is not recommended).
Read-only bank access can be a good option; however, it has some limitations. Many banks don’t keep the images for a long period of time, so your firm could be left scrambling if you’re trying to reconcile past bank statements. Additionally, many banks charge a per-check fee to access check images, which adds to your/your clients’ costs. Ultimately, you might still need to rely on the client to send check information to you, which can cause frustration. Think about it from their perspective: they provided you access, and you still don’t have the information needed.
Introducing an automated process for collecting check images can eliminate many of these challenges, as well as unlock a number of benefits for your firm and your clients.
Benefits of collecting check images
Since so many businesses are still using checks, collecting the images with technology can be invaluable to your bookkeeping process. Thankfully, there are tools to help make this easier. As noted above, having access to check information (whether stubs or images) will provide a couple of key benefits for both your practice and your client's business. Let’s examine a few.
Better audit trail
Collecting source documents is essential to creating a reliable audit trail for your clients. If they are paying with checks, you need the images to identify payee, date, and check purpose. When you utilize technology to efficiently collect check images, you instantly and permanently create an information log for every check your client writes.
Having this information available at your fingertips will make a routine audit easy and painless. Moreover, it will help you provide valuable advice and information to your client, as well as build trust, since you’ll have one more piece of information they need, when they need it.
Easier, more accurate reconciliation
As mentioned, seeing check information without context raises a lot of questions. To complete reconciliations, you may be going back and forth with the client just to find out who checks were addressed to, and for what purpose.
The benefit of collecting check images is obvious here: immediate access into payees, dates, amounts, etc. so you’re able to reconcile without waiting on clients to provide information. You’re also able to attach the image to the corresponding transaction in your accounting software. No need to wait on the client, and no more guessing games for you and your staff.
There’s a better way to collect check images
An efficient, technology-enabled system for collecting, organizing, and managing check images can make the entire process seamless. Thankfully, as part of Hubdoc’s Auto-Fetch, check images can be collected, sorted, and managed automatically from several dozen banks.
In addition to checks still being a prevalent part of North American businesses, e-transfers are steadily becoming a common business payment method. As with checks, however, e-transfers also often leave much to question when they appear in the bank feed. Fortunately, Hubdoc’s Auto-Fetch technology also collects e-transfer information in a similar way that you collect check images, eliminating many of the questions usually associated with payments.
Check out the lists below for some of the major banks from which Hubdoc can fetch check images and e-transfer information.
Check image enabled connections:
|CIBC||Coast Capital Savings|
|Royal Bank of Canada||M&T Bank|
|Bank of America||Wells Fargo|
|Fifth Third Bank||PNC Bank|
|Regions Bank||Comerica Bank|
E-transfer enabled connections:
|Bank of America||Chase Bank|
|Royal Bank of Canada||TD Bank|
|Wells Fargo||Bank of Montreal|
Want to learn how to use Hubdoc to start collecting your clients’ check images? Learn more today!
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