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5 reasons to say goodbye to cheques

5 reasons to say goodbye to cheques

Your business might benefit from making the switch from cheques to electronic payments.

More than 30 years ago, cheques were the country’s No. 1 non-cash payment option. But according to the Reserve Bank of Australia, cheques now make up only a very small percentage1 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 things to consider if you are thinking about electronic payments for your business.

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. 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.

3. Security

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.

1. Reserve Bank of Australia, Payment System Board Annual Report 2017 https://www.rba.gov.au/publications/annual-reports/psb/2017/trends-in-payments-clearing-and-settlement-systems.html

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.