Paying in Cheques

We don’t currently have a solution for paying in cheques. We know this is annoying.

We’re keeping our ear to the ground for solutions for this. If anyone has experience of workarounds they can share that would be great.

Our best solution for this would be to have a provider that can help us facilitate cheque deposits by taking a photo of the cheque, although we haven’t yet found a provider that can help us with that.

For sole traders, you can get cheques written out to your name and pay them into a personal account, then transfer the money over.

For limited companies, if the cheque is written out to your company name, and Coconut is the only account you have in that name, then this can create a challenge.

If anyone has experience with this and how they got around it please share that here.

You looked into Tesseract? https://github.com/tesseract-ocr

Thanks @graeme, that would help with the data extraction from the cheque I think? We also need a way to clear the funds with whichever bank the cheque relates to. We’ve not found a provider that will do that yet that we can plug in.

Have you looked at providers like Smart Debit? https://www.smartdebit.co.uk/services/cheque-processing-and-imaging/

Thanks for the link. I gave them a quick call.

They help businesses that receive lots of cheques get them banked, but assumes the business they do that for has a bank account that can accept cheques. They don’t provide the facility for a company like us to clear the funds from the account of the writer of the cheque.

What we need is a provider that can clear the funds. They may need to do that through our banking partner (PPS) directly but maybe there’s a solution out there that can manage the payouts to a designated current account without going through PPS.

I’ve not seen anyone that does that though. Cheque usage is in decline so not seeing much innovation from providers to help us with this.

Thanks again for sharing @graeme

Ah that makes more sense. And yes, I wouldn’t expect many entrepreneurs to pursue a dying payment method. I expect Starling, who have just released this feature, have built their own as they can do the clearing.

Unfortunately the client of my limited company had concerns about the warning messages they got from their banking system when trying their first bank transfer to my Coconut account, so they raised a cheque instead. It looks like I now have the following options?

  1. open another business bank account with a traditional bank so I can pay the cheque in
  2. try to persuade my personal bankers to accept a cheque made out to the ltd company (unlikely to succeed I think)
  3. ask the client to cancel the cheque and send the bank transfer to coconut despite their concerns (I know I could ask them to do an initial transfer for a nominal amount to allay their fears, but that will be an extra hassle for them)

Anyone have any better ideas?

Thanks!

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Hi @MarkC I’m sorry about this. Not a great experience and one that we should get sorted.

I’m going to chat to the team in the morning and come back to you about this.

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I thought cheques were obsolete? It’s like a fax… why do businesses still use thm?

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Hi @MarkC - sorry you’ve had this challenge with your client not wanting to pay due to the warnings they’ve just seen.

This is due to the introduction of something called ‘Confirmation of Payee’ which has just been mandated for the 6 largest banks in the UK. It’s a new account name checking process that’s come with a new suite of bank warnings that people are seeing for the first time.

We’ve written up an article on it here: https://help.getcoconut.com/en/articles/4325779-confirmation-of-payee

As these warnings are new I think they are throwing people off at the moment. As people get used to these new warnings (which will be showing for any bank that’s no part of the scheme yet) this should be less of a problem.

We’re speaking with our banking partner about their timeline for enrolling to the service too.

As for cheques, unfortunately we’ve still not managed to identify a provider to help us. We will continue the hunt.

For your client, could you go back to them and explain to them about confirmation of payee and ask for a transfer to be made? Check out that article I linked above as there are some useful links in there. It’s a warning that they’ll see with anyone they send a payment to that doesn’t bank with the major traditional banks, so you shouldn’t be the only supplier of theirs experiencing this issue.

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Thanks for the explanation @adamjgo, hopefully my client will understand and also the banking partner manage to get enrolled soon.

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