Receiving payment by cheque, is it risky ?

ranDom_tAsk

I'm just wondering is there much risk involved in been paid by cheque by a customer in my business ?

The majority of my sales will come in the form of cash, but obviously some ppl will want to pay via cheque, I'm not talking large amounts of money here, maybe is the sum of €50-€100.

What do you think ?

Cheers.

seamus

If they have a cheque guarantee card, or it's a business cheque, then OK. If not, no way.

antoinolachtnai

If you don't know your customers to some degree, I wouldn't advise depending on a company cheque alone.

There is a service out there called 'Transax' (I think) which will guarantee personal cheques up to a few hundred euros, providing there is a banker's card. But the banker's card guarantee should be enough for you.

There is a procedure for dealing with banker's cards and it is important to follow all the steps of the procedure exactly.

Nuttzz

tranax is a good system but it does cost if you not getting many cheques and they a for 50-100 euro. what about saying not goods/service until cheque clears?

ico

Cheques for that amount are generally ok. If they were to bounce the cheque holder would have to pay his bank a fee of around €15.

Besides if you dont except cheques you may be turning away much need business. And you will be isolating customers. Most people are trustworthy.

ranDom_tAsk

Cheers guys thanx for the tips.

I'm going to see my bank tomorrow @11am to set up my business account and just wanted to know that.

I'm sure as part of my business account I'll have my own cheque book.

I'd say 99% of my sales will come in the form of cash, but we all know ppl use cheques also and I wanted cater for those ppl too, I can't be turning away money now can I ?

I just wasn't to sure of the system.

Thanks again.

nlgbbbblth

Cheque Guarantee card only covers cheques up to €130
and is only available for personal cheques. The number and expiry date must be written on the reverse.

Cheques drawn on "business" accounts (company, partnership, individual trading under a business name, other non-personal) are not covered.

But in reality only a small % of cheques bounce.

RainyDay

seamus wrote:

If they have a cheque guarantee card, or it's a business cheque, then OK. If not, no way.

Hi Seamus - What makes you think a business cheque is OK?

RT - You'll need to make a sensible judgement about the individuals offering you payment by cheques (which are not covered by cheque guarantee cards). Yes - you do run the risk of being ripped off. Make sure your invoice includes a disclaimer to say that you withold title in goods sold until paid in full. This gives you legal ownership of any goods not paid for, though it can still be difficult to enforce this ownership.

The benefit of cheque payments is that you don't have to worry about your staffing ripping off a few quid, though that may not be an issue for you.

vector

RainyDay wrote:

Hi Seamus - What makes you think a business cheque is OK?

RT - You'll need to make a sensible judgement about the individuals offering you payment by cheques (which are not covered by cheque guarantee cards). Yes - you do run the risk of being ripped off. Make sure your invoice includes a disclaimer to say that you withold title in goods sold until paid in full. This gives you legal ownership of any goods not paid for, though it can still be difficult to enforce this ownership.

The benefit of cheque payments is that you don't have to worry about your staffing ripping off a few quid, though that may not be an issue for you.

When I lodge a cheque (from PSTB, BOI, AIB) how long do I have to wait ebfore I can be 100% sure that it hasn't bounced, a week?

Our man in Havana

1 week would be reasonable.

nlgbbbblth

vector wrote:

When I lodge a cheque (from PSTB, BOI, AIB) how long do I have to wait ebfore I can be 100% sure that it hasn't bounced, a week?

assume your account is with Bank A
and the cheque is drawn on Bank B, or C or D or E.

Monday - lodge it in Bank A
Wednesday - cheque hits Bank B account
Thursday - Bank B must decide by close of business to pay or bounce the cheque
Friday - if cheque has bounced Bank A should have it back in the post by now. They may telephone you to let you know it has bounced. Alternatively they may just post the cheque together with an Advice of Unpaid item slip. Either way your account will be debited the amount of the cheque plus a fee for the unpaid. It is then up to you to chase the drawer of the cheque

obviously the post can delay things, Bank A may not receive the unpaid cheque until the following Monday and you may not known till say, the following Tuesday or Wednesday.

ranDom_tAsk

LOL, so it is risky taking cheques !