More than 30 years ago, cheques were the country’s number one non-cash payment option. But according to the Reserve Bank of Australia, these days they make up just 1.2% of all non-cash payments.
One of the reasons for this dramatic decrease is that cheques need to be handled manually, making them more expensive and slower than online payment methods. Here are some benefits your business may be able to enjoy by making the switch to electronic payments.
1. Cut your costs
Issuing and depositing a high volume of cheques can often be expensive when running your business. You can keep costs down by using a business bank account that allows money to be transferred online.
2. Save time
Writing, posting and banking cheques can be time-consuming, to say the least. Banking online can save you time and effort by letting you manage your cash anywhere and anytime – for example, transferring a payment to a supplier and requesting electronic payments for faster access to funds.
Cheques can be ripped or lost in the mail and are more susceptible to fraud, which can leave you with an unhappy supplier, unpaid bill and cash flow gap to fill. The amount or payee on the cheque can also be changed if it ends up in the wrong hands. With electronic bank transfers, you’re in control of the amount being paid and account being paid into.
4. Manage your cash flow
Using cheques can make it hard to track your cash flow as they generally take up to three business days to clear (some can take even longer) and your account balance only updates when your suppliers cash their cheques. Switching to online payments can make it easier because you can access money in your account quicker – transfers between most CommBank accounts are instantaneous.
5. Simplify your bookkeeping
Reconciling cheques can mean laborious data entry that’s easily avoided with electronic payments. Start by setting up automatic bank feeds so you don’t have to manually enter transactions. If you have a large customer base you can match payments quickly with BPAY, which can issue unique Customer Reference Numbers (CRNs) to your customers.