Conformed heel: the secret is in the clause

The conformed cheque may be of interest to you for payment., However, for security reasons, if you are considering accepting it and it will be the means of payment of your choice, you may need to look for other alternatives compared to a bank cheque, the conformed cheque does not offer as many guarantees and facilities for the creditor. Do you want to know why? Are you interested in knowing the most important aspects of this payment method before making a decision that could compromise the financial health of your business?

What is the shaped heel?

The shaped heel or conformed cheque is a means of payment associated with a physical document, on which a conformity clause is recorded. This is the key to the usefulness of this type of cheque, as it is in this declaration that it is recorded:

• That whoever undertakes to assume the debt has a balance in his account to meet the payment.

• That the amount of the sum is withheld until the cheque to which payment is to be made is presented.

• That the money that will be needed to meet the debt incurred may not be used for any other purpose.

It follows that it is the issuer of the cheque who is personally liable for the debt. Even if a financial institution, your bank, is involved at certain points in the process, the bank in no case assumes the payment obligation towards the creditor.

The conformed cheque has advantages for the debtor because:

• It is a convenient way to make a payment.

• Bank support is available, blocking an amount equivalent to the amount committed in the payment, which avoids overspending and not being able to meet the debt when it falls due.

However, from the creditor's point of view, this is not such an interesting option. Despite the conformity clause that can be read on the back of the cheque, and despite the fact that this statement makes important points, collection is not entirely guaranteed.

The main source of risk in relation to the conformed cheque is the time frame. Specifically, after two weeks (a fortnight is the usual period) the financial institution no longer holds the money in the debtor's account. This means that the debtor could make use of the money and, upon cashing the cheque, the creditor would find that there are no funds to meet the obligation.

It could also be the case that the company whose company issued the conformed cheque enters into insolvency proceedings. or suffer a seizure. In such cases, the chances of getting the money that was agreed would be negligible.

For these reasons, if it is to be accepted as a means of payment for a product or service, It is advisable to opt for a bank cheque, since in this case, unlike with a certified cheque, it is the financial institution that issues the cheque and is therefore obliged to pay.