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#1222858 - 07/27/09 04:40 PM Cash Back for DBA Account
mkp122 Offline
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Posts: 200
NJ
We have a customer who comes in and deposits part of their check and wants a portion back in cash. The checks are made out to John Doe DBA John Doe Company. Anyone see a problem with this?

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#1222888 - 07/27/09 05:25 PM Re: Cash Back for DBA Account mkp122
Happy Birthday RBanker Offline
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RBanker
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Austin Texas
Not as long as it's John Doe doing the transaction - the checks are payable to him - and all other procedures relating to paying cash back are followed.
Last edited by R Banker; 07/27/09 05:26 PM.
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#1224499 - 07/30/09 11:45 AM Re: Cash Back for DBA Account mkp122
Elwood P. Dowd Offline
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In general, cashing checks payable to a business is a lousy banking practice. It facilitates income tax evasion and, if the business is a separate entity from the owner, may facilitate fraud against the business or its creditors.

That's the foundation point, but your example is slightly different because you are not cashing the checks, you are splitting the deposit or giving cash back. That means there is still a paper trail tied to the business receipts.

The other variant is your reference to a "DBA." For some bankers that means a sole proprietorship. However, any business entity can do business under an assumed name; e.g. corporations, partnerships, LLC's etc. DBA is not a synonym for a sole proprietorship.

Assuming your business is a sole proprietorship, splitting the deposits is probably not a significant issue. If the business is an entity, it's a lousy banking practice.
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#1224501 - 07/30/09 11:53 AM Re: Cash Back for DBA Account Elwood P. Dowd
rlcarey Online
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Galveston, TX
"If the business is an entity, it's a lousy banking practice."

I whole heartly concur. This is especially true when your standard resolution (corporate, partnership, etc.) which grants specific powers to individuals to act on behalf of the entity most likely does not support this type of transaction.
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#1224512 - 07/30/09 12:32 PM Re: Cash Back for DBA Account mkp122
Elwood P. Dowd Offline
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Next to Harvey
In an another post I just made a comment about the value of giving tellers rules that they cannot interpret and was reminded of what I had just said here.

If your tellers are told they can split deposits on sole proprietorships, but not on other types of business accounts, you give them room for interpretation. My experience is that simply does not work.

Your bank's policy could well be that you simply do not give cash back on a deposit to any business account. If your customer needs cash to operate the business or a "draw" of funds for his own purposes he can write himself a check. His accountant would appreciate it if you handled it that way.
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#1231103 - 08/11/09 07:18 PM Re: Cash Back for DBA Account Elwood P. Dowd
EdieT Offline
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EdieT
Joined: May 2009
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PA
In our experience, we agree with Ken. Try to make it black & white for your tellers.
We would have them deposit all checks payable to the business into the business account & write a check for the cash he wants.

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