Check Representment
Check representment is a service offered by banks that resubmits a bounced check to the check writer's account until funds are available for payment. Check representment is a service offered by banks that resubmits a bounced check to the check writer's account until funds are available for payment. Check representment is a service offered by banks to resubmit a bounced check to the check writer's account until funds are available. In the check representment process, the bounced check is usually converted into an electronic item for representment. Check representment reduces time and expense involved in collections processes for businesses and helps banks flag accounts that have a history of bounced checks.
What Is Check Representment?
Check representment is a service offered by banks that resubmits a bounced check to the check writer's account until funds are available for payment. In the check representment process, the bounced check is usually converted into an electronic item for representment. Many banks and financial institutions offer check representment services to their business clients at no charge.
Understanding Check Representment
For businesses that rely on incoming checks, there are many benefits of check representment. It gives businesses another opportunity to collect payment for products supplied or services rendered, eliminating the time and expense of the collections process.
It also enables a bank to flag accounts that have a history of bounced checks, allowing the bank to warn a businesses of potential non-payment, so that it can require advance payment. Representment also often gives electronic checks priority over paper checks, since they have lower handling costs and shorter processing times.
Typically banks present a check for payment twice. This is in line with the Federal Reserve's operating letters which states that its check processing service cannot be used more than two times. But the Uniform Commercial Code (UCC), which is used to determine procedures for commercial contracts, does not have explicit instructions for the number of times that a check is presented. In such cases, businesses can present the check manually for clearing at a bank's branch.
Related terms:
Bill Presentment
Bill presentment, like a bank check, is an instruction that directs a third party to pay the recipient a fixed sum. read more
Bounced Check
A bounced check is slang for a check that cannot be processed because the writer has insufficient funds. read more
Check
A check is a written, dated, and signed instrument that contains an unconditional order directing a bank to pay a definite sum of money to a payee. read more
Checking Account
A checking account is a deposit account held at a financial institution that allows deposits and withdrawals. Checking accounts are very liquid and can be accessed using checks, automated teller machines, and electronic debits, among other methods. read more
Checkless Society
The term "checkless society" refers to a hypothetical future in which all financial transactions are processed electronically. read more
Pay to Order
Pay to order refers to negotiable checks or drafts paid via an endorsement that identifies a person or organization the payer authorizes to receive money. read more
Postdated
A postdated check or draft will display a future date on it. A check user will often write this in to specify that they do not want to withdraw the amount of the check until the date specified. read more
UCC-1 Statement
A UCC-1 statement is a document which serves as a lien on commercial property in a business loan. Discover more about UCC-1 statements here. read more
Uniform Commercial Code (UCC)
The Uniform Commercial Code (UCC) is a set of business laws that regulate financial contracts and transactions employed across different states. read more