Referring to a system, transaction, or financial arrangement that relies primarily on the use of cheques (also known as checks) as a means of payment. This implies that funds are transferred via paper documents instructing a bank to release money from an account. cheque-based systems were, and in some contexts still are, common for various financial activities, including salary payments, settling invoices, and making retail purchases. They often require physical handling, postal delivery, and bank processing, potentially involving delays and security vulnerabilities. The term highlights the contrast with more modern, electronic payment methods.
Cheque-based meaning with examples
- Before online banking, most businesses operated on a cheque-based system. Suppliers sent invoices, and payments were made via mailed cheques, often creating lengthy delays in the reconciliation process. This system required physical storage of cancelled cheques for audit purposes and frequently involved manual reconciliation, contributing to an administrative burden.
- The shift towards digital payments significantly reduced the reliance on the old cheque-based payroll system. Employees now receive their wages through direct deposits, avoiding the hassles of waiting for mailed cheques, depositing them, and dealing with lost or misplaced documents, making it quicker and safer.
- In some niche markets, particularly those involving individuals without access to electronic banking, cheque-based transactions might persist. This could include certain services or small business operations, demonstrating the lingering presence of a paper-based financial transfer process. It often contrasts with electronic payments.
- The company's financial reports clearly outlined the transition away from a cheque-based system for expense reimbursements. The new system provides a more efficient and auditable process using digital transfers, simplifying accounting practices and streamlining payments across the organization.