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beware of new law!!!

Discussion in 'Business Operations' started by Frontier-Lawn, Oct 22, 2004.

  1. Frontier-Lawn

    Frontier-Lawn LawnSite Silver Member
    Posts: 2,938

    i saw this on TV last nite about a new check law. so if any of you that float checks for supplies, or equip. it could take as Little as 2 hours for the check to clear now, instead of a few days. :dizzy: check 21 law
     
  2. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    I think the new law starts on Oct. 28.

    Before, banks had to physically transport checks to the appropriate banks to clear them, now they can send them electronically. So you could write a check, and the recipient could go cash it right away, and if the money's not in your account, it will bounce.
     
  3. Frontier-Lawn

    Frontier-Lawn LawnSite Silver Member
    Posts: 2,938

    ya they said that now because of this law. 7 billion more checks a year could bounce
     
  4. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    If someone is floating checks in their business then they are working from a house of cards that will tumble down around them and their business.
     
  5. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372


    I completely disagree.

    There's times when I'll float a check for any number of reasons.

    Well, wait, I take that back.

    I'll send a check in the mail, knowing that the 3 days it gets to whoever, I'll have a check back to cover it.

    As for going to the dealer, I just tell them I'll catch them next time if I'm a little tight on the cash flow.
     
  6. John Gamba

    John Gamba LawnSite Fanatic
    from ct
    Posts: 10,812

    Lets Look at the positives, Your Customers checks will clear faster.
    John
     
  7. beransfixitinc

    beransfixitinc LawnSite Senior Member
    Posts: 592

    Well, I'll be sure and hold your unit safely here in the shop until you can catch us next time.
     
  8. Frontier-Lawn

    Frontier-Lawn LawnSite Silver Member
    Posts: 2,938

    you have to agree this is a good thing to know about also
     
  9. oneandonlyjojo

    oneandonlyjojo LawnSite Member
    from NY
    Posts: 125

    all i know is with commerce bank checks clear same or next business day. while my other banks take a few days. so if check clearing is an issue join there bank
     
  10. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    If your customer banks at Commerce, then their check will clear faster, because Commerce doesn't have to send the check out anywhere. If the check is from another bank, Commerce sends it to the other bank to clear. That's the gist of it anyway. I'll have to ask the girl at the bank to explain it more thoroughly to me. Point is, when the new law takes effect, it won't matter which bank a check comes from, they can all transmit the checks electronically, which will make 'em clear much faster.

    You should be able to open an overdraft line of credit, or open a business savings account that the bank can draw from if there's no money in your checking account. :angry:

    No reason for the angry face, my 6-year old wanted to click on it...LOL
     

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