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 a shaped heel?

The formed heel conformed cheque It is a payment method associated with a physical document, which includes a clause of conformity.. This is where the key to the usefulness of this type of cheque lies, as it is in that statement where it states:

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

The amount will be held until the cheque is presented, to which the bearer will be paid.

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

From all this, it is understood that the drawer of the cheque is personally liable for the debt. Even though a financial institution, their bank, participates at certain points in the process, the bank in no case assumes the obligation to pay the creditor.

The shaped heel has advantages for the debtor as:

It's a convenient way to formalise a payment.

Bank support is available, blocking an amount equivalent to that committed for payment, which prevents overspending and being unable to meet the debt when it falls due.

However, from the creditor's perspective, it is not such an attractive option. Despite the compliance clause that can be read on the back of the cheque, and even though this statement records important points, collection is not entirely guaranteed.

The main source of risk regarding the shaped heel is the deadlines. Specifically, once two weeks have passed (a fortnight is the usual timeframe) the financial institution stops holding the money in the debtor's account. This means that they could make use of the money and, when the cheque is presented for payment, the creditor would find that there are insufficient funds to meet the obligation.

The situation could also arise where the company that issued the certified cheque enters administration. or suffer an embargo. In those cases, the chances of obtaining the agreed-upon money 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, as in that case, unlike a certified cheque, it is the financial institution that issues the cheque and, therefore, is the one obliged to pay.