Cheques: Is the End Nigh?
Did you know that you may not be able to use or accept cheques for much longer? If the Payments Council has its way, central cheque clearing in the UK will cease at some point in 2018, so we could all be ditching our cheque books in eight years time.
The Payments Council was set up by the government in 2007 to ensure efficiency and integrity of payment methods in this country, and set future strategy for them. Its recommendation to set this target date is currently being looked into by the Treasury Select Committee. A final decision will not be made until 2016.
The cheque system has been in use since the 1700s but nowadays we have many other payment methods available, and it has gradually become less and less popular. It will be dealt another blow in 2011 when the cheque guarantee card system is withdrawn: another decision of the Payments Council.
Many small businesses still accept cheques from their clients. If you are among them, you need to be aware of these policies. You must have other methods of receiving payments set up, and it would be wise to get going on this early. Make sure these alternative methods are easy for your customers to use, and encourage them to start doing so as soon as possible.
In any case, cheque payments can be a burden for the smaller business, causing payment delays by being lost or held up in the post or wrongly made out; and then of course there is the clearing time.
So why wait until the end of the cheque to put an end to it for your small business?