Taking checks and/or accepting cash

[SethB]

While cash is always welcome to pay our band, we also wanted to have the ability to take a check occasionally. But my bank told me it couldn’t cash or deposit a check made out to “Vintage Jazz Band” unless we had a business account in the name of the band. The bank also said we couldn’t open such an account unless the band was a separate legal entity.

We looked into creating a corporation or a partnership, but both things seemed too complicated and expensive to set up and maintain. So instead, I filed a “Fictitious Name Certificate” with our County Clerk’s Office, indicating that I was a sole proprietor doing business as the “Vintage Jazz Band.” Once that was filed ($50 county filing fee), I could open a business checking account in the name of the band and order some checks ($100 minimum charge for 400 checks). But now I could accept, deposit or cash checks made out to the band. As an added bonus, filing the Fictitious Name Certificate also gave us some added protection against someone else using the same business name in our county.

Ironically, the IRS has had never had a problem with me filing a Schedule C for the band along with our personal income tax returns -- with or without proof of the band’s legal standing. I guess the old adage “”Money talks, nobody walks!” applies here? SETH

[sgosnell]

You don't have to order checks, and if you do, you don't have to order them from the bank, you can use any third-party check printers. The bank will likely try to convince you that you must do both, because banks are in business to make money, but there's no legal requirement. My bank will supply up 100 checks for free, per order, and allow free reorders at reasonable intervals. The big national banks may have all sorts of requirements, along with insane fees. I don't use them. You can also just have the "Vintage Jazz Band" endorse the checks to you, which you could then deposit into your personal account. But again, most banks try to squeeze every penny out of every customer, and may try to make it as difficult as possible. But there are many banks in most cities, and competition can help customers. It's not difficult to change banks.

[alltunes]

Ironically, the IRS has had never had a problem with me filing a Schedule C for the band along with our personal income tax returns -- with or without proof of the band’s legal standing. I guess the old adage “”Money talks, nobody walks!” applies here? SETH

Perfect move on your part though “fictitious name” is an odd way of describing it. My county clerk office refers to it as a D/B/A….doing business as.

Regarding the IRS they are in the business of processing first and maybe asking questions letter. Not hearing from them doesn’t necessarily mean they approve of anything.

[SethB]

You don't have to order checks, and if you do, you don't have to order them from the bank, you can use any third-party check printers.

You are exactly right about the check situation, thanks for making the suggestion. Our bank gave us a dozen (!) free checks when we opened the account, but that was it. So we did order checks from a third-party source, and got a better deal than we would have gotten from the bank itself. I'm glad to hear your bank is more accommodating, and wish it was the same for us. I use a regional-size bank and also try to stay away from "the big guys," which are usually very impersonal and inflexible. But I'm afraid the day of the small-town bank is pretty much over; they've mostly been acquired by larger banks -- which are often then bought by even bigger banks.

Before we had the band account, I did try to endorse a check made out to the band over to me personally. But that didn't fly with the bank, so we ended up opening the band account. That's actually turned out to be a good move, because now the band's money isn't mixed in with my own money in my personal checking account. As the band's business grew, that arrangement eventually got to be a little confusing and difficult to follow. SETH

[Litterick]

Banks in New Zealand no longer issue or accept cheques.

[SethB]

OK, now I'm curious -- why don't NZ banks accept or issue checks anymore?

Do you now have a cashless society, an all-cash society, both, or something else? SETH

[Litterick]

OK, now I'm curious -- why don't NZ banks accept or issue checks anymore?

Do you now have a cashless society, an all-cash society, both, or something else? SETH

They went out of fashion. By 2021, less than one percent of payments were being made by cheque, so the four largest banks stopped accepting them that year. Almost all payments can be made online. We have a system called EFTPOS —Electronic funds transfer at point of sale — which allows customers to make purchases and withdraw cash from their bank accounts using a debit card, or a smart device on their phones. Almost every customer has a card (issued by their bank) and almost every shop has a machine on the counter. The usual daily limit is $10,000. Larger sums can be paid by bank transfers.