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This may interest those who buy and sell on the market place and elsewhere but I don't think it is widely known. Up until now if I bought something from the market place (for instance) the sale could not be confirmed until the funds transferred a day or so later but now that transaction and all electronic transactions will be done instantly.
Goodbye cash and cheques, faster electronic payments are nearly here
So, does this mean that paying all invoices will be instantaneous, unlike today where you pay your electricity or water and your financial institution deducts the amount from your account, but delays sending payment to the other financial institution for up to 2 days? I have been challenged by utilities as I pay on the day due and am able to produce receipts proving such. One even suggested that I pay early . . . I behaved myself and asked the person if they pay all their bills early :wink:
I wonder how this is is going to impact on (often very large) projects where quotes are basically "at cost" and a substantial amount of a project's profit is made by "manipulating" the cash flow so that sizeable amounts can be placed on very short term money markets. When things get tight and the project overseers haven't quite made what they want, the subcontractors and tradies being last in the line and get fobbed of by the usual excuses like, cheques in the mail, or waiting on transfer time.
This is no knee jerk decision so everyone who used cash on for short term lending would know about it, I first learned of it at least a year ago.
probably very little change. I think most large contract payments have been electronic for some time.Quote:
Originally Posted by BobL
Where subies and tradies get done over is the payment terms imposed by the big players. It's not that unusual for a subbie to have to wait 90 days between having a claim accepted (and acceptance might be 30 days after the claim is submitted) and the payment being processed by the prime contractor.