For start-up entrepreneurs who have recently formed their companies and are busy operating the financial aspect of their businesses , among others, some important financial factors can inadvertently be forgotten.
More than half of the UK’s small businesses have gone through the trouble of a bounced cheque in the last twelve months, and this has prompted the Better Payment Practice Group (BPG) to issue a new advisory for the said businesses.
Even though cheque payments as a general business practice has been decreasing among UK traders and consumers, they still remain the preferred payment method among some micro-businesses and online freelance professionals.
The advisory from the BPG is aimed at informing entrepreneurs about the three-day clearing system that does not include Saturdays, Sundays, and Bank Holidays. Online traders are also advised that they should not accept cheques or banker’s drafts unless they know and trust the issuer of the cheque.
These and other information has been posted in the BPG’s section on how to avoid cheque fraud. The section also has advise on issuing cheques and receiving them.
One example of the group’s reminders is the fact that cheques can be returned to an entrepreneur after five days if it is discovered to be fraudulent, with the expectation that the business would fit the bill for the lost funds.
Also, a section on Cheque Guarantee Services clarifies that entrepreneurs who have received a returned cheque after it has been approved by a collection and cheque guarantee services company will be reimbursed by the said company.