When dealing with money transfers between businesses, clients, and personal accounts, the finer details can seem insignificant but ultimately have a huge impact on what you can actually do and what you can’t.
In the case of “doing business as” (DBA) checks, cashing them can get complicated real fast due to issues relating to identifying where money is going and who is cashing a check.
If you think you’ll need to deal with DBA checks in the near future, here’s some helpful information to help you navigate the whole process.
There Are Differences Between Personal And Business Accounts
Business accounts are easily differentiated from personal accounts since they are accounts that represent a business entity rather than a specific individual. However, while figuring out the difference between the two is easy, interacting with each type can be very different.
In the event a business account represents a “sole proprietorship,” there really isn’t much of a difference between that and a personal account since the money that comes and goes from that account can be traced to whoever owns it.
When dealing with an LLC or similar multi-partnered setup, it’s much less clear who is benefitting from money transfers, so there are a lot of safeguards in place to prevent people from just quickly taking money out of business accounts. For instance, if someone writes out a check for you, but it’s in the name of the business you operate or represent, you can’t just put it in a personal account you own; you have to directly put it in a business account that’s identifiably related to what’s signed on the check.
Since there are multiple parties involved in business enterprises, it needs to be very clear on checks where money is coming from and very clear where it’s going, which is a process that’s typically more stringent than when it comes to personal accounts.
Cashing Checks Can Be Tricky, But Not Impossible
In terms of specifically cashing checks, you need to go through a somewhat more involved process before you can collect the money you’re looking for.
Simply going up to a teller and asking them to cash a dba name check is very rarely going to work. Each financial institution is different, but the vast majority of banks and credit unions don’t allow people to cash dba checks by default due to the high potential for theft.
That being said, there are ways you can essentially cash a check without having to literally cash one. The most popular method is to simply deposit a check into a designated business account and then withdraw the same amount of cash from it, assuming you’re allowed access to the account.
Alternatively, you can take advantage of various cash-checking services, which can be found in the form of independent businesses or at certain grocery and retail store chains. Cash-checking services accept both dba and regular checks, so getting money from them should be relatively hassle-free; however, it should be noted that these types of money services charge a sizable portion of a check’s amount as a fee. So, you’re going to get less money overall.
Check Endorsements Are Usually Necessary
In the event a financial institution is willing to cash a business check, you’ll need some way of proving your identity. Usually, this takes the form of signing the back of the check, declaring your official business title, and providing some form of official government ID.
Oftentimes though, banks will require people looking to cash business checks to officially become an authorized signer on an account. To do this, you’ll need to sign a card beforehand bearing your signature that will be referenced when you sign off on a dba check.
Figuring Out How to Cash A DBA Check
Businesses are hard enough to run when you don’t have to deal with a lot of red tape, but there are quite a few rules and regulations relating to dba checks for very legitimate security reasons. While inconvenient at times, it should put you at ease to know that cashing dba checks is very much possible; it just takes a little extra work.