Can anyone point me in the direction of why it is "good business practice" to require that all checks made payable to a business, be required to be deposited into an account of the same name, and not cashed by a person known to be the owner of the business.

Depending on the type of business, the "owner" may or may not be authorized to conduct such a transaction for the business entity - i.e., corporate/partnership resolution. Most bank's standard corporate/partnership resolutions do not provide for "authorized signers" to negotiate checks made payable to the business for cash. It increases the likelihood that the bank is assisting in tax fraud/revenue hiding, etc. There are a great number of reasons not to do it, but it comes down the risks the bank wants to take, i.e., how well you want train and what types of decisions you want your tellers making on a transaction by transaction basis.

When the subpoena demands copies of every check negotiated through your bank payable to the business, it is handy to have them all going into the business account. I would not want to be the one reviewing every teller pay for the past 5 years to make sure none were cashed.

Al

Here is an answer on why checks should be deposited and not cashed. Lots of other Q&A's are available at Infovault