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Methods Of Paying Suppliers - Coggle Diagram
Methods Of Paying Suppliers
CASH
Used for:
Small payment
Wages
Risk
easily stolen
can get lost in the post
difficult to control
NO receipt, NO evidence
CHEQUE
Who responsible?
Acoount department
Where to keep?
Lock and key compartment
Safe
Locked drawer
Who can access?
Only certain specified individuals
What bank need to know?
Who the one that can sign
How?
On BANK MANDATE FORM, or
On BANK MANDATE LETTER
Process
Accompanied with bill
Fill bank giro credit form
Bank clerk will stamp the bill
Hand cheque at bank
Bank receives payment
Pay some charge
P/s : can also send a crossed cheque by post
BANK GIRO CREDIT
BANKER'S DRAFT
Warning!!!!
CAN'T be stop/cancel after issuing
STANDING ORDER
Payment for
Hire purchase
Rental
Insurance premiums
REGULAR PAYMENT & FIX AMOUNT
How to use?
Inform bank to make arrangement for regular payment
Tell the fixed amount
Frequency of each payment and due date
Banking detail of supplier
Notes
Can also sent in letter
Bank => Standing order mandates
DIRECT DEBITS
REGULAR PAYMENT
How to use?
Person who receives payment will initiates it
Request
VARIABLE AMOUNT, IRREGULAR INTERVALS
FIXED AMOUNT, REGULAR INTERVALS
Process
Fill direct debit instruction
It will be sent to supplier
Supplier will arrange with its own bank
Direct debit will be set up
Safeguard
Changes must nnotified within 14 days
Customeer can cancel by notifying bank
immediate refund of any incorrect debit
only approved organisation
BACS
Process
Sends for information to BACS for processing
Supply a file of payment to the bank
Bank process
Bank transfer electronically to payee's bank account
Transfer usually 3 working days
CHAPS
Computerised system to enable same day clearing
Process
Settlement bank sell access to CHAPS computer
Bank make high charges
Notes
Not used every time