Dishonoured Cheques

It's obviously a very worrying sign if a customer's cheque is dishonoured on first presentation.

The first thing to do, of course, is to get in touch with the customer and ask for an explanation and either a replacement cheque or some other form of payment.

No matter what excuse the customer offers, and never mind how speedily you are paid thereafter, you will need to get an up-to-date Credit Report and base future trading on the information it provides. It would be wise in any event to reduce the customer's credit limit.

NEVER RETURN A DISHONOURED CHEQUE TO THE CUSTOMER. It is important evidence of default - and, of course, that the customer accepted its indebtedness, and intended to discharge your account.