Cancelling the cheque
Jul 17 2009
Using cheques is becoming a thing of the past, as small businesses plan to phase out this form of payment.
A third of SMEs intend to stop using cheques to pay other businesses in the next 12 months, with one-in-nine of the 1,020 surveyed saying they will stop accepting this form of payment in the next year, says business information company Creditsafe.
The company says that SMEs could recoup at least £65 million in labour savings each month by scrapping cheque payments.
David Knowles, marketing director at Creditsafe, says: ‘We could be witnessing the beginning of the end for cheque payments. They are viewed by many businesses as inefficient, time consuming and a security risk compared to Bacs transfers and card payments.’
Adds Knowles: ‘Increasingly we are witnessing a trend for cheques to become obsolete. Financial controllers dislike the fact that many firms use cheques as a way to delay payments, deliberately failing to sign or date the cheque so it has to be returned.’
Recent research from payment processing body Bacs found that the amount of late payments owed to small businesses increased by 40 per cent from £18.6 billion in 2007 to £25.9 billion in 2008.