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August 2011 | Angeline Albert
are calling on banks to speed up the time it takes to process cheques so small
suppliers can be paid more quickly.
a report published yesterday by the TreasurySelect Committee, MPs welcomed the decision
of the Payments Council
not to scrap cheques, but urged the organisation to work with banks to make
processing quicker than the five days it can take.
Council, which was established by the Treasury, had set a date of 2018 to
abolish the use of cheques, but in July it announced it would abandon the
deadline and allow the payment method to continue indefinitely.
The Forum of PrivateBusiness was one of several organisations opposed
to the abolition, and submitted evidence to the Committee stating the importance
of this payment method for small businesses.
the use of cheques has fallen in Europe, they remain a favoured method of
payment in parts of world, including India and China.
to Andrew Jesse, vice president at e-procurement firm Basware, buyers need a
flexible attitude to payment methods depending on their vendor’s location. In
Finland, for example, payments are conducted electronically in the vast
majority of business-to-business transactions.
cheque processing procedures are a must to prevent them being used as a
stalling tactic for payment, but at the end of the day, we still need cheques
to work internationally,” he told SM.
“A business needs to be aware of cultural differences when operating in other
countries – for example India or the US.”