Formed cheque: are you sure your business is interested?

The conformed cheque can be easily distinguished from a bank cheque by its reverse side. It contains the conformity clause, a guarantee that makes this type of cheque one of the preferred forms of payment for those who wish to ensure the collection of an amount due.

However, From both the debtor's and the creditor's point of view, the conformed cheque entails some disadvantages. Considering its cons as well as its pros will help to decide whether or not it is the right payment method for the company.

A cheque is a written order from one person to another to pay a stated sum of money from a person's account with a bank.

The cheque is a type of document that represents a payment order.. There are many types of cheques, such as bearer cheque, crossed cheque, nominative cheque, bank cheque or certified cheque..

What is a certified cheque? Definition and concept

The conformed cheque is a payment instrument that states the payee, unlike a cheque to bearer, for example, and also the drawer, who is the one who, by means of this payment, decides to settle an outstanding debt with the latter.

Furthermore, unlike what happens, for example, with a bank cheque, ensure that the amount to be debited will be in the drawee's account and available for the beneficiary.

Características del cheque conformado que te ayudan a identificar su validez

For a certified cheque to be considered valid, it must possess a series of characteristics, including the following:

Indication of the place and date of issue.
Name of beneficiary.
Determination of the sum payable on sight.
Certification, visa or conformity marking with the signature of the issuing bank.

Did you know the features of a certified cheque? Have you ever had an incomplete one in your hands?

Bank cheque or certified cheque?

For the holder of a certified cheque, there are certain guarantees who present it as an attractive option, preferable to a bank cheque:

The certified cheque obliges the bank to pay the amount indicated. in the document, except in cases of bankruptcy or seizure. This guarantee ensures payment satisfaction for the policyholder.
The bank cheque may end up resulting in non-payment. if, for example, the drawer had no funds in the account.

Disadvantages of the conformed cheque

However, There is a disadvantage for the creditor that is never present in the case of a bank cheque, and it has to do with the time limit for collection:

The certified cheque states the date of its issue and from that moment, only fifteen days are available to collect the amount. From that moment, the bank releases the amount it has held to the drawer.
The bank cheque does not impose a time limit, so it can be cashed whenever you wish.

For those who use a confirmed cheque as a means of payment, there is also a significant disadvantage:

A certified cheque requires the drawee bank to retain the amount specified in the document for fifteen days.. Within that timeframe, the debtor will not be able to access that money.
With a bank cheque, the money is available until such time as the creditor has cashed his cheque and withdrawn the amount from the bank.

Taking these pros and cons into account, before resorting to a banker's draft as a means of payment, it will be necessary to consider whether it is truly the option that best suits the business, The following table sets out the types of cheques that are available, or whether it is preferable to opt for one of the other types of cheques available.