By Business & Finance The National Payments Plan (NPP) is warning businesses that Government departments, local authorities and other State agencies will stop sending and receiving cheques from businesses from September 19th 2014 or e-Day.
e-Day is an important part of the NPP plan to reduce costs and improve cash-flow in the Irish economy. e-Day was launched in September last year, to give businesses and public sector bodies 12 months to prepare for the smooth transition to electronic payments. Cheque usage has halved in Ireland since 2005 but Irish businesses still write 33 million cheques every year.
NPP programme manager, Ronnie O’Toole, said: “Businesses and consumers will benefit when Ireland reduces its dependence on cheque and cash payments, to safer and more efficient electronic payments. Cheques are an expensive means of payment for businesses because of bank charges, stamp duty, postage, time spent making lodgements, unpaid cheques, and the ‘cheque is in the post’ culture of late payments.”
Businesses in most other EU countries have stopped using cheques. The NPP estimates that savings of up to €1bn per annum can be made if Ireland were to match best practice in Europe by migrating away from cheques and cash in favour of electronic payments. This will result in reduced costs and improved cash-flow for both the business sector and consumers.
Simon Bell, commercial manager, Sage Ireland said: “Recent research by Sage revealed that 70% of businesses have not heard of e-Day, despite the fact that 77% use cheques on at least a monthly basis. Businesses need to ensure they are prepared for the eDay change and realise that saying the cheque is in the post will now longer work as an excuse for late payment. They will have to think a little differently about the payment methods that they make available to customers, as a delayed receipt coupled with an instant payment to government may leave them with a temporary but significant cashflow issue. There are significant savings to be made for businesses – we estimate that sending and receiving just six cheques a week could save almost €5,000 per year by switching to ePayments.”
Businesses are advised to prepare for e-Day by discussing payment solutions with their contracting Government body and their banks.
e-Day will not affect consumer cheque usage, such as social welfare payments or pension payments.
