Technology as an Extra Asset
Put the old-fashioned checkbook away and step into the world of EFT. Electronic Funds Transfer can make your life much more efficient. Whether you step into Online Bill Pay through your bank or use a creditor’s website, almost any bill can be paid online. This not only saves on the expense of buying paper checks and the ink to print them, but the cost of postage and the damage to the environment as your payment rides in a truck from your place to the destination. It is probably easier than you think. Online bill paying can prevent late payments and expedite payments without the cost of overnight delivery.
When you pay a bill online, you can either order your bank to pay a vendor or person on your behalf or visit the website of a creditor. Your bank will offer the choice of paying virtually anyone from your bank account. You simply create a “Payee” by assigning a unique name, providing the address of where to send the check, and which account you want the money withdrawn from to pay the bill. If the bank has an EFT relationship with your vendor such as American Express, the money is quickly transferred from one account to another. The transaction is usually complete within 24 hours. If you go to the website of American Express, you can accomplish the same thing by providing American Express with your bank routing number, known as an ABA number. They will contact your bank and request the funds from your bank using EFT. There is generally no charge from either your bank or the vendor for using EFT.
HOW IT WORKS
Recurring bills such as vehicle payments, mortgage payments, insurance premiums and loan payments can be set up to be paid automatically on the same day of each month. You will never have to remember to make a payment again. There are no checks lost in the mail, no inflated interest rates or late fees because a payment didn’t arrive on time.
Delaying a payment
If you are going to be on vacation when a bill is due and you don’t want to pay it early, you don’t have to. You can enter a request at most websites to draw the money from your bank on a specific date. You could even set up a payment for three months from now if that is the due date. You always can cancel a payment before the date you have selected using automated phone systems, the Internet, or even a Smartphone application.
Almost all banks offer integration to popular programs such as Quickbooks. With integration, you can write a check in Quickbooks and send it electronically using your online banking. All of your payments requested through your bank are uploaded into your accounting system and show up in your accounting system’s check register. Using either system, you always know your true bank balance at any given moment.
The conversion process
For many, the hardest part of converting is the fear about securely transferring money via the Internet. The protections in place offer a higher level of security than dropping a check in a public mailbox. Start small with your monthly automatic payments. As other monthly bills arrive, such as utilities, add them to your list of payees until eventually every bill you have is paid electronically. You can even set up direct deposit of your employee checks using EFT.
ABOUT LCT contributing editor
Jim Luff is an operator from Bakersfield, CA who began his career in the industry as a private chauffeur in 1990. In 1993 he joined The Limousine Scene as the general manager and later becoming a partner. LCT recognized Jim as an Operator of the Year in 2001. E-mail any questions to him at Jim@LCTMag.com.