CHAPTER 5: CASH APPLICATION, DEDUCTIONS, AND DISPUTE MANAGEMENT
Checks usually contain the following information:
Place of issue Check number Date of issue Payee (the person who the check is made out to) Amount of currency, including what type of currency it is (i.e., U.S. dollars, pounds, euros, etc.). This amount is listed as a numeral as well as spelled out. Signature of the drawer Routing/account number. In the U.S. the routing transit number is a 9-digit number in which the first 4 digits identify the U.S. Federal Reserve Bank’s check-processing center. Digits 5 through 8 identify the specific bank served by that check-processing center and digit 9 is a verification check digit, computed using a complex algorithm of the previous 8 digits. Fractional routing number, also known as the transit number, consists of a denominator mirroring the first 4 digits of the routing number and a hyphenated numeral, also known as the ABA number, in which the first part is a city code (1-49), if the account is in one of 49 specific cities, or a state code (50-99) if it is not in one of those specific cities; the second part of the hyphenated number mirrors the fifth through eighth digit of the routing number with leading zeros removed. Memo line where the purpose of the check can be indicated Business checks typically also have remittance information attached on the check stub, indicating what the payment is for. A check is generally valid indefinitely, although this varies depending on which country the check is drawn in, or unless it states on the check that the check is only valid for a specific period of time, often 90 to 180 days. PAYMENT EXCHANGES New technology has opened the door to many new payment methods. Mostly used in the B2C arena, some payment exchanges are emerging for use by B2B. For many years PayPal dominated the market on internet payments, but today there are numerous payment exchanges to choose from. Note that this list represents just a small fraction of the available online B2B payment platforms. Providers merge, change names, and come onto the scene quite rapidly, so thorough research should be conducted when considering them. PayPal. Processes global payments for more than 200 countries. Has a per-transaction limit, so not suitable for big-ticket payments. Accepts payment through cards, Venmo, crypto, and more. Integrates with ecommerce platforms. Service fees and subscription fees vary.
Stripe. Global payments. Supports over 135 different currencies and multiple different payment channels: ACH, wire transfers, cards. Charges transaction and service fees.
77
THE ACCOUNTS RECEIVABLE SPECIALIST CERTIFICATION PROGRAM E-TEXTBOOK
Made with FlippingBook - Online catalogs