Postdating cheques Random adultcam
However, within the UAE there are serious factors that need to be considered when using cheques as payment.
If a cheque bounces it is treated as a criminal offence with the potential of jail time, hefty fines and an overall risk to your credit score.
Furthermore, your B2B relationship will inevitably strengthen with frequent transactions via cheques, if and only if, they are honoured.
Small and Medium-sized Enterprises (SMEs) often rely on post-dated cheques, thus for a sturdy cash-flow, it is essential that cheques do not bounce.
Post-dated cheques hold an array of problems that may distort the future of your business.
This quote is extracted from a case where a post-dated cheque was misused (full article).
A rise in using cheques for payments has occurred due to the high fees on electronic transfers.
It is important to understand the penalties of a bounced cheque, especially due to the fact that the charges differ from between emirates within the UAE.
For example, in Dubai you would expect a fine from around AED 2,000 – AED 10,000.
An investigation of such could assess the risks of B2B arrangements and allow you to mitigate any potential risks before entering an agreement.
Moreover, a cheque is only valid for 3 months from the date of issuance; this understanding creates tight timeframes upon payments.
A potential benefit of this payment method is how it can foster healthy and long-lasting business relationships.