For UK businesses expanding into the US, there’s an unexpected financial relic to contend with: the paper check (or, to use the British spelling, the “cheque”). While the UK has largely abandoned checks in favor of digital payments, they remain a common and sometimes preferred method of payment in American business transactions. This can be frustrating for companies accustomed to fast, efficient bank transfers.
So how can UK businesses operating in the U.S. adapt without losing their minds (or their money)? Here are a few practical strategies:
- Be ready to accept checks
Even if your company prefers digital payments, some American customers or clients – particularly smaller businesses and government entities – will insist on paying by check. Many online banks do not accept check deposits. Thus, if you believe you will receive checks from customers, be sure to open an account at a bank that will accept them. Ideally you will pick a bank that allows you to deposit checks via a mobile app.
- Build-in extra time for check payments
Check payments mean payment delays. If a customer or client sends a check by mail, it could take days to arrive. Once deposited, the bank may place a hold on the funds before they become available. If you’re receiving check payments, monitor your cash flow carefully.
- Encourage digital alternatives
While checks are still common, many US businesses are open to electronic payments. Make it easy for them by including your bank details (including the ACH/wire routing and account numbers) on every invoice. Better yet, use automatic links within your electronic invoice that permit your customer or client to seamlessly pay the invoice as soon as it arrives. Don’t include a payment coupon on your invoice, which by its nature invites them to send a check.
- Beware of check fraud
Check fraud is a growing problem in the US due to the ease of check alteration and counterfeiting. If you must accept checks, take precautions. Deposit them promptly and watch for inconsistencies in handwriting or amounts.
The US payment landscape may feel a bit antiquated at times, but things are changing. Digital payments are gaining ground. By preparing for the reality of checks while promoting modern payment methods, UK companies can navigate this quirky aspect of US business with minimal friction.