What Is a Business Cheque?

Starting up a small business takes a lot of work, and there are a number of different steps that you will need to complete in the early stages. One of these is opening a business bank account, which will allow you to receive and make payments, whether these are B2B transactions or with your customers – it’s not enough to just have a personal account, even if you’re running a very small business.

Part of deciding which account to go for will be the payment methods that you can accept from your customers. This is where business cheques come in. It may seem like an outdated form of payment, but they can in fact still be used today, and will require a business cheque account to process them. Keep reading to find out more about these accounts and how you can cash cheques.

What is a business cheque?

Before discussing how to use them, it’s important to answer the question “what is a business cheque?”. Well, a cheque is a document that orders the bank to pay the amount specified to the recipient's account. The person who writes the cheque must have an account from which the funds will be drawn.

A business cheque is a cheque that is written against a business cheque account rather than a personal account. This means that it is based on a company’s assets, from which the funds will be withdrawn when the recipient cashes the cheque. For example, these may be used in B2B transactions where a business pays a supplier or vendor.

How to cash a business cheque

While it may be simple to cash cheques for personal transactions, cashing a business cheque can be more complicated. Whereas personal cheques can be cashed quickly and easily using a smartphone or in a branch, you may need to provide some additional documentation when cashing a business cheque.

The specifics will vary depending on your bank, but you may be asked to provide proof of identity such as a photo ID like your driving licence or passport. You may also be required to give proof of address, which is ideally through a utility bill. Other possible requirements include a bank statement from recent months, tax information or a letter from a solicitor or accountant.

Once you do manage to cash your business cheque, you should see the payment arrive in your business account within a few working days.

How long is a business cheque valid in Australia?

One of the most common questions when receiving a business cheque is “how long is a business cheque valid for in Australia?”. It’s important to get the timings right so that you don’t end up missing out on revenue.

Luckily, there are no strict expiry dates for cheques. However, a bank may refuse to accept a cheque if they consider it to be too old, which may be anything from around 6 months. To be safe, it’s best to try to cash your cheques as soon as you receive them.

Are there any business cheque account fees?

Business cheque accounts are an essential for anyone running a business, whether big or small, which means that you will also need to accept business cheque account fees. The fees that you pay will depend on your specific bank account.

Some bank accounts will charge you a monthly fee that will allow for a certain number of transactions to be carried out with no additional transaction or processing fees. Or, you may have an unlimited amount of a given type of transaction, such as electronic transactions. Some transactions, such as banker assisted transactions or express cheque deposits may incur additional fees.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.