Download - Making, receiving and recording payments made to or from a business Welsh translation of above
Making, receiving and recording payments made to or from a business
Welsh translation of above
Learning Objecives
Understand the purpose of different methods of payments
Complete financial records to record incoming and outgoing cash
Be able to record payments made and received
Be able to analyse payments made and received, allowing for VAT
Methods of Payment
Cash Cheque Debit Cards Credit Card BACS
Which Methods are the most popular?
A) CashB) ChequeC) Debit CardsD) Credit CardE) BACS
CashChequeBACS
Credit CardsDebit Cards
ChequesWhat’s on a cheque?
Usually takes 3 working days for a cheque to clear Is a paper based form of payment “promise to pay” Cheques must be presented to a bank to obtain
payment
Debit Cards
A plastic card, issued by the bank which allows payments to be made without writing a cheque or carrying cash.
Customer hands over debit cart
Seller puts card in chip and pin machine
The bank electronically takes from customer account and adds to business account (3 days)
Credit Cards
Just like a Debit Card
BUT
You are borrowing the money (it does not come out of your account)
You get a statement at the end of each month
You have to pay some off each month You have to pay interest on the balance
BACS Banks Automated Clearing System
Credit Transfers Used for large transfers on money, usually
wages Direct Debits
The business can request payment for different amounts e.g. utility bills
Standing Orders Customer instructs bank to make regular
payments to business
It is a way of transferring money between accounts without exchanging cash or cards
The main advantage of using cash for payments
A) Ideal for small purchasesB) Better for large amountsC) Can be used for mail order or
onlineD) Customers don’t have to
remember payment datesE) Enables the cardholder to borrow
money A) Ideal for small purchases
The main advantage of using cheques for payments
A) Ideal for small purchasesB) Better for large amountsC) Can be used for mail order or
onlineD) Customers don’t have to
remember payment datesE) Enables the cardholder to borrow
moneyBetter for large amounts
The main advantage of BACS for payments
A) Ideal for small purchasesB) Better for large amountsC) Can be used for mail order or
onlineD) Customers don’t have to
remember payment datesE) Enables the cardholder to borrow
moneyCustomers don’t have to remember
payment dates
The main advantage of Debit Cards for payments
A) Ideal for small purchasesB) Better for large amountsC) Can be used for mail order or
onlineD) Customers don’t have to
remember payment datesE) Enables the cardholder to borrow
moneyA) Can be used for mail order or online
The main advantage of Credit Cards for payments
A) Ideal for small purchasesB) Better for large amountsC) Can be used for mail order or
onlineD) Customers don’t have to
remember payment datesE) Enables the cardholder to borrow
money Enables the cardholder to
borrow money
What is the main disadvantage of using Credit cards?
A) has to be countedB) Takes time to clearC) High interests so expensive way to
borrowD) Customers may fail to check price
changes and fail to budget.E) Danger of fraud
High interests so expensive way to borrow
What is the main disadvantage of using Cash?
A) has to be countedB) Takes time to clearC) High interests so expensive way to
borrowD) Customers may fail to check price
changes and fail to budget.E) Danger of fraud
It has to be counted
What is the main disadvantage of using Cheques?
A) has to be countedB) Takes time to clearC) High interests so expensive way to
borrowD) Customers may fail to check price
changes and fail to budget.E) Danger of fraud
Takes time to clear
What is the main disadvantage of using Debit Cards?
A) has to be countedB) Takes time to clearC) High interests so expensive way to
borrowD) Customers may fail to check price
changes and fail to budget.E) Danger of fraud
There is a danger of fraud
What is the main disadvantage of using BACS?
A) has to be countedB) Takes time to clearC) High interests so expensive way to
borrowD) Customers may fail to check price
changes and fail to budget.E) Danger of fraud
Customers may fail to check price changes and fail to budget
Cash why use it why not use it?
Payment is made immediately
Ideal for small purchases
Convenient
Cash has to be counted
Has to be locked away for security
Can be stolen
Chequeswhy use them why not use them?
Safer than cash Better for large
amounts
Takes time to clear It can bounce Errors can result in
completion and non payment by bank
Debit Cardswhy use them why not use them?
Guaranteed payment
Can be used for mail order or online
Takes 3 days for money to be received
A fee must be paid to the bank
Danger of fraud – hence chip and pin
Credit Cardswhy use them why not use them?
Guaranteed payment
Can be used for mail order or online
Enables the cardholder to borrow money
Takes 3 days for money to be received
A fee must be paid to the bank
High interests so expensive way to borrow
Credit Transferswhy use them why not use them?
Fewer security problems – no cash
Records kept through bank statements
Quicker than writing lots of cheques
The bank needs notice before releasing wages
They need checking as errors cost money
Direct Debitwhy use them why not use them?
Guaranteed payment
Customers don’t have to remember payment dates
Businesses can change amount and payment date
Money is still taken even if there is no money in customers account
Customers may fail to check price changes and fail to budget.
Standing Orderswhy use them why not use them?
Customers don’t have to remember payment dates
Customers don’t have to write out cheques
Money is still taken even if there is no money in customers account
Customers may fail stop standing order and go on paying for services they are not receiving.
Cash Books – Payments made by business