Bill of exchange / open cheque

Discussion in 'Accounts & Finance' started by eteb3, Sep 12, 2020.

  1. eteb3

    eteb3 UKBF Regular Free Member

    221 34
    Our charity needs to make an urgent grant to someone who doesn't have a bank account. We *could* pay cash but that's a big hassle for various reasons.

    I realise this is for the bank, but as they're closed til Monday -

    Does anyone know if bills of exchange are still generally accepted by banks? Obviously the grantee can't have a cheque crossed "a/c payee", but perhaps I can write a letter to the bank "Pay Joe Bloggs or to his order £X".

    Then we would have a DIY open cheque.

    Any reason why the bank wouldn't accept it, if properly signed?

    Could he even endorse the document in someone else's favour, like in the good old days?

    Afaik Bills of Exchange Act is still in force; wondering whether practically the banks no longer do this.
    Posted: Sep 12, 2020 By: eteb3 Member since: Jul 18, 2019
  2. Bob Morgan

    Bob Morgan UKBF Enthusiast Free Member

    950 258
    Open the Cheque by writing 'PAY CASH' as a 'Crossing?'
    Posted: Sep 12, 2020 By: Bob Morgan Member since: Apr 15, 2018
  3. bodgitt&scarperLTD

    bodgitt&scarperLTD UKBF Regular Full Member

    363 143
    Presuming it's a small amount? If it's that urgent I'd pay them out of my own pocket and sort it out via expenses or something.
    Posted: Sep 12, 2020 By: bodgitt&scarperLTD Member since: Nov 26, 2018
  4. eteb3

    eteb3 UKBF Regular Free Member

    221 34
    Thanks both for useful suggestions.

    Do you know for sure that this works? Or is it 'worth a try'? Thanks.
    Posted: Sep 12, 2020 By: eteb3 Member since: Jul 18, 2019
  5. KAC

    KAC UKBF Ace Free Member

    1,260 286
    I'm old enough to remember open cheques but doubt whether any of today's bank tellers will have seen them and unlikely to pass the bank's security instructions

    If the grant is for a specific purpose, can you not pay direct to supplier? Otherwise cash is the best alternative provided you can do it in a way to satisfy your own trustees/auditor/independent examiner/charity commission
    Posted: Sep 12, 2020 By: KAC Member since: May 7, 2017
  6. johndon68

    johndon68 UKBF Big Shot Full Member - Verified Business

    3,437 630
    The overwhelming majority of cheques these days come 'ready crossed' these days with A/C Payee Only on them so you can't 'open' them like you used to. It is a long time since I worked in branch banking but I think this has been the case since around 1991/1992.

    You can make a cheque out to Cash but that only enables the account holder to withdraw cash, not a third party.

    Posted: Sep 12, 2020 By: johndon68 Member since: Nov 2, 2009
  7. KAC

    KAC UKBF Ace Free Member

    1,260 286
    I left branch banking in 1970 (National Provincial) and still remember printing names on cheque books with an Adreema machine. This was a new wheeze as previously you had to recognise the signature. You could choose open or crossed cheques at that time and you had to pay for a book of cheques to pay for the stamp duty on each cheque o_O
    Posted: Sep 13, 2020 By: KAC Member since: May 7, 2017
  8. Nico Albrecht

    Nico Albrecht UKBF Enthusiast Full Member - Verified Business

    830 170
    Don't think the bank will accept that sort of things anymore. Have you considered a western union transfer? You pay via bacs or credit card and the 3rd party can access it via Western Union shops in cash.
    Posted: Sep 13, 2020 By: Nico Albrecht Member since: May 2, 2017
  9. eteb3

    eteb3 UKBF Regular Free Member

    221 34
    This is what we went for in the end. Total pain, because of the accountability requirements you mention, but just about ok as a one-off.

    This is actually a great idea if the cost isn't crazy: thank you, will investigate for the future. EDIT: £2 to send £400! That's the solution next time. :)

    It may just about be possible still? I turned up some guidance here: see 'Can a crossed cheque be uncrossed'. But that may conflict with 'What is the reason for having a cheque that is crossed but doesn't have a/c payee?' - which suggests that if it's crossed a/c payee it can't be opened. But that in itself seems odd: the drawer can obliterate 'a/c payee' and sign against the alteration, before signing in the normal place - and then 'a/c payee' was never part of the cheque? But it may be one has no recourse against the bank: here.

    Anyway, all largely academic: if the tellers are going to turn their nose up, we're not advantaging our beneficiary.

    Thanks all for the comments.
    Last edited: Sep 13, 2020
    Posted: Sep 13, 2020 By: eteb3 Member since: Jul 18, 2019
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