The government, its departments and agencies no longer issue cheques to or accept cheques from businesses. From a business perspective this has an impact on payments to government such as VAT payments and any employer deductions to payroll made at source.
Here are five practical tips published by the Irish Independent to assist businesses in being ready for life without cheques:
1.Review your historic payments to government or its agencies in order to understand the typical value of these payments, how often they are paid, and identify the date the next payment is due in order to understand what impact this will have on cashflow.
2. If these payments were previously made by cheque, you will need to find out the recipient’s payment details including BIC / IBAN, in order to make a successful payment on time to avoid late payment penalties.
3. Understand your current processes for making payments to identify which have to change, and ensure that you are aware of the SEPA regulations on timelines for submission of electronic payments. If pay-runs currently happen at a particular time of the week or month, these may need to change in order to fulfil the requirements under SEPA.
4. Recognise that e-Day is simply the next step under the National Payments Plan that will fundamentally change the way that businesses manage payments as the market shifts from cash and cheque to electronic formats. You will need to ensure efficient cash flow management and enable faster payments into your business by facilitating your customers to pay you electronically or offer card payments
5. Whilst e-Day might necessitate process change in your business which is typically uncomfortable and time consuming, it is important to bear in mind that cheque payments typically carry longer clearing times, are more costly and lead to longer delays in getting paid as a business.