With digital technology,
many common financial items are being changed from paper to electronic. Bills,
checks, and even account statements now come in digital form. Stock certificates
are no exception. Should you change your paper certificates to digital? For
administrative reasons, more and more companies, both large and small are
choosing to use physical
stock certificates to issue the stock and to act as a
visual reminder of the benefit. They are also using stock certificate
administration software to manage the certificate files
which offers several advantages.
Added security
- paper
certificates can be easily stolen, lost or destroyed. Stock holders do not have
to worry about losing their
digital certificates as they can be tracked electronically and simply sent a
monthly or quarterly statement regarding their holdings. Furthermore, in terms
of security, it is more difficult for someone to attempt to perpetrate a fraud
when dealing with digital stock certificates as there are generally safeguards
in place to deter such events. The use of a password-protected stock tracking
system and the ability to backup important data provides peace of mind not just
for the plan administrator, but stockholders as well.
Saves time
and money – any stock plan administrator can tell you that processing
paper stocks can be time-consuming and costly. Not only must you print,
carefully examine and then ship each individual stock certificate, but every
time there is any type of change that will potentially impact stock issuance,
you will have to do it all over again! Moreover, imagine the time it takes to
organize and prepare any reports needed?
If you have issued many stock or experienced several
changes throughout the report period, going through your stock ledger and paper
share records can be both time consuming and nerve wracking, particularly as the
chance of inadvertently making a mistake is often higher using a paper system.
An
electronic stock tracking program can provide you with the right tools to
exercise better control over your stock program and quickly produce statements
and corporate reports in an organized and timely manner. Finally, training your
employees to implement and use an electronic stock program is often an easy and
painless process.
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