By: AllBusiness.com

When you accept a check as payment for goods or services, you do so with the faith that the customer has money in their account to cover it. When they don't, the check bounces and you don't get paid.

To understand your recovery options, it helps to understand what happens when you deposit a customer's check.

After you deposit a check, your bank credits the amount of the check to your account and begins the process of collecting that amount from your customer's bank.

Clearinghouses help banks by routing checks to the appropriate financial institutions and providing settlement services. Your bank's clearinghouse "presents" the check to your customer's bank. If the funds are not available in your customer's account, the request for payment is declined. Checks can be sent through the clearing process only two times. After that, the check is returned to your bank.

Your bank debits your account and sends the check back to you, explaining the check was returned for insufficient funds. The bank's involvement stops here, and sole responsibility for collecting the funds now falls on you.

You can help prevent bad checks and boost your chances of getting what's owed in several ways:

Subscribe to a check authorization agency. These services let you scan a customer's check at the point of sale to determine whether a customer has bounced checks recently. If they have, you can refuse to accept their check.

Ask your bank to notify you the first time the check doesn't clear. Many banks automatically send checks through the clearing process twice before they return them to you. If your bank notifies you the first time a check is rejected, you can call your customer's bank and ask whether the funds are currently available. If they are, you can then redeposit the check.

Try electronic check re-presentment. Although checks may go through the traditional clearing process only twice, electronic check re-presentment gives you a third chance to get paid. By this method, checks are cleared through the Automated Clearinghouse Network, a computer network that financial institutions use to electronically exchange payments and remittance information.

Check with your bank to see if it offers check re-presentment services or contract with one of the many electronic-recovery companies. You can also do electronic check re-presentment yourself. For more information on electronic check collection, contact the National Automated Clearing House Association.

Go to the bank the check is drawn on. Once a check has bounced and been returned to you, you can still take it in person to the bank it's drawn on and get paid if the money is in your customer's account. Call the customer's bank to check if the funds are there; when they are, be ready to go collect the money.

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