Tag Archives: checks

Why do some Companies still pay by Cheque?

(btw that’s correct spelling for Australian – “Check” if you’re American)

At least inside Australia, paying by direct bank transfer is very easy, and fast. For some things, paying by credit card is easier although one side tends to have to eat some costs for that (% to the credit card gateway).

What surprises me is that some companies still pay by cheque. Process-wise, this makes no sense to me:

  1. write out the cheque
  2. get signature from authorised person in the company
  3. address envelope
  4. post

What a lot of effort!

After due consideration, I can think of only one reason why companies do this: cashflow management, aka by sending a cheque through the mail they’re actually delaying the payment coming out of their bank account.

If it is just cashflow trickery, do you feel that kind of business process is valid? Shouldn’t a company just be able to pay its invoices when they come in?

What do you think? Any other plausible reasons?