Check Representment

AAA

DEFINITION of 'Check Representment'

A system wherein a check that bounced or did not clear when it was first presented because the account on which it was written had insufficient funds, is re-presented when sufficient funds are available in the account. In the check representment process, the bounced or returned 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.

INVESTOPEDIA EXPLAINS 'Check Representment'

The benefits of check representment services are manifold. It gives businesses another opportunity to collect payment for products supplied or services rendered, thus reducing the time and expense of going through the collections process or managing bad debts.


Also, the electronic nature of check representment means that repeat offenders with regard to multiple NSF checks can be flagged. This would give businesses advance notice of potential non-payment, and they can therefore insist on 100% advance payment from such clients.


As well, electronic items have an advantage in that they are re-presented more quickly and also receive priority over paper checks. Electronic items also have lower handling costs and much shorter processing times than paper checks.

RELATED TERMS
  1. Bill Presentment

    The submission of a bill of exchange for payment. A bill, such ...
  2. Check

    A written, dated and signed instrument that contains an unconditional ...
  3. Cashier's Check

    A check written by a financial institution on its own funds. ...
  4. Bounced Check

    A slang word for a check that cannot be processed because the ...
  5. Rubber Check

    Another name for a "bounced check." A rubber check is a slang ...
  6. Debit Card

    An electronic card issued by a bank which allows bank clients ...
Related Articles
  1. Savings

    Are Your Bank Deposits Insured?

    Learn how the FDIC is helping to keep your money in your pockets.
  2. Personal Finance

    Using Economic Capital To Determine Risk

    Discover how banks and financial institutions use economic capital to enhance risk management.
  3. Brokers

    Top 7 Biggest Bank Failures

    Many people assumed these giants were too big to fall - they were wrong.
  4. Options & Futures

    Who Backs Up The FDIC?

    The FDIC insures depositors against loss, but what happens if it runs out of money?
  5. Taxes

    What is the best method of calculating depreciation for tax reporting purposes?

    Learn the best method for calculating depreciation for tax reporting purposes according to generally accepted accounting principles, or GAAP.
  6. Fundamental Analysis

    Are accounts receivable used when calculating a company's debt collateral?

    Learn how accounts receivables are recorded as assets on a balance sheet; they are used when calculating a company's total debt collateral.
  7. Fundamental Analysis

    Work In Progress (WIP)

    Work in progress, also know as WIP, is an asset on the company balance sheet. WIP is the accumulated costs of unfinished goods that are currently in the manufacturing process.
  8. Fundamental Analysis

    What is the difference between cost of equity and cost of capital?

    Read about some of the differences between a company's cost of equity and its cost of capital, two measures of its required returns on raised capital.
  9. Fundamental Analysis

    Is depreciation only used for tangible assets?

    Learn if tangible assets can be depreciated, as well as what other assets are eligible for depreciation so you can account for them accurately.
  10. Fundamental Analysis

    What does a high weighted average cost of capital (WACC) signify?

    Find out what it means for a company to have a relatively high weighted average cost of capital, or WACC, and why this is important to lenders and investors.

You May Also Like

Hot Definitions
  1. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  2. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  3. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  4. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  5. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  6. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
Trading Center