The ability to view transparency in After Effects is not just helpful when compositing graphics but it can be critical when rendering out video. Numerous video formats, such as MP4, don’t support transparency. When exporting to such formats transparent areas will typically be rendered as black. Being able to quickly identify areas that are transparent can thus be very useful.
When activated, the Toggle Transparency Grid button, located at the bottom of the Composition panel, shows a checkerboard pattern wherever there is transparency within a composition.
The composition settings allow for a background colour to be set. While this colour is displayed within the After Effects interface it is not rendered when a video is exported. One of the easiest ways to remedy this is to add a Solid to the bottom of the composition in whatever colour the video background needs to be.