A check draft is a secure and guaranteed form of payment created by the recipient and authorized by the account holder. Unlike a regular check, a draft ensures that the payment is backed by the issuing financial institution. As there is no chance of bouncing, check drafts are ideal for high-value transactions that need security and reliability. This method of payment is utilized in industries that deal with high-value goods like luxury retail, real estate, and art. One such industry that greatly benefits from this method of payment is auction houses.
Auction houses acquire valuable fine arts, antiques, and rare collectibles from sellers and sell these items through a competitive bidding process. When you run an auction house, selling these high-value goods requires payment guarantees to avoid fraud or insufficient funds. As these items may cost thousands or millions of dollars, check drafts are the most efficient method to collect payments.
However, creating them manually can be a time-consuming task as it requires visiting your financial institution in person. Then, you have to fill out forms and track the issuance and status of each check draft. If there is any incorrect information in any details provided, it can lead to draft rejection or delays.
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Craft Your Check Drafts with the Cloud-Based Platform
Auction houses can utilize Zil Money to manage their check drafts efficiently. With the cloud-based platform, you can create check drafts by obtaining permission from the account holder. The platform helps you easily receive one-time as well as recurring payments with low transaction and gateway fees. You can eliminate the difficulty of visiting your financial institution every time you need to create or track your check draft.
Let us see how to create a check draft on the platform.
- Log in to the platform and click on Receivables on the side panel.
- Then, from the drop-down, you may select Check Draft.
- You will be taken to the check draft page, then click on New to create a new check draft.
- Add relevant details like client name, amount, date, check draft number, etc, into the fields.
- Once completed, you may click on the Save button and will be directed to the Check Draft list.
- All the check drafts you created will be shown in the list. The platform allows you to print, delete, or set up recurring check drafts.
- If you do not want to create, import check drafts from an Excel or CSV file.
Easily Accept Check Drafts Over the Phone
With Zil Money, you may accept your client’s check draft over the phone for your auction house. All you need to do is send your client a link to their phone or email using the platform. With this link, they can easily fill out their bank information and sign it. Then, you may choose any template offered by the platform and enter your client’s details. This check comes without a signature stating, “No signature required and approved by the depositor.” With the payer’s authorization, you can instantly print the check using a regular printer and blank stock paper on the platform. After printing, you may deposit these checks at any financial institution, like a regular check.
Use Check Drafts to Get Guaranteed Funds for Your Auction House
While collecting payments for an auction house that facilitates high-value transactions, check drafts will be one of the best options to consider. When you use drafts, it offers more security than a regular check. This is because checks usually depend on the payer’s account balance at the time of clearance. If there are no sufficient funds, the check will bounce delaying your payments.
As the items sold are expensive, it is very important for an auction houseto collect payments with the most secure method. For instance, if a painting worth $2 million is in the auction, it is crucial to confirm the buyer has sufficient funds. Then, only you can assure your seller that the payment is legitimate and cannot be reversed.
When you use a check draft, the funds are guaranteed by the issuing financial institution. Once a check draft is issued, the funds are drawn from the requesting payer’s account. Then, these funds are moved to the reserve account of the financial institution until the payee cashes the draft. So, you do not have to worry about the payments, as the financial institution has already debited the draft amount. By utilizing check drafts, you can avoid delays, fraud, and potential disputes of failed payments. As they are widely accepted, you can use check drafts to collect payments, even from international buyers.
Conclusion
To collect large payments for valuable items, auction houses can rely on a check draft. Utilizing drafts can offer you guaranteed and timely funds with reduced fraud risk. You may focus on your core operations by using Zil Money to create and print check drafts with a few clicks.
