Cashing US-$ cheques

VBK

Hello!

This is my first post, so I hope I've chosen the right category...

I have just started working for myself, and one of my clients, who's in the US, has sent me a cheque made out in US$.
Any idea how I can cash/pay the money into my UK bank account without losing most of the money to the bank?

Thanks a lot for your help!
Vic

Middlers

If this is going to be a regular client try opening a dollar account with your bank. It can then be transferred to sterling when the rates are favourable.

jenniferpa

While in a way I would agree with Middlers, I don't think it's a good idea to hold on to dollars at the moment. You may just have to bite the bullet and pay the fees. Ask your bank how much they will charge. The alternative is to use a service like auctionchex (https://auctionchex.com/) who I believe charge much lower fees. A bigger issue is sorting this out for the future, assuming you will have more payments. How do you bill your U.S. client? In $ or £? You need to come to some agreement with them. If you still end up with the payment in $, don't forget that the exhange costs should be an allowable business expense.

Jennifer

VBK

Thanks, Middlers and Jennifer.
I'll check those two options.
I know I'll need to find a solution for future payments. It's quite cheeky of the client to make me, the provider, pay the bank charges in the first place, but I can't be too choosy in the beginning, can I...

Out of curiousity: Why do you think it's not a good idea to hold on to dollars at the moment, Jennifer?

Thanks a lot
Vic

jenniferpa

The dollar/sterling exchange rate is not doing to well. Although I don't think it will fall as far and as fast over the next 3 months, as it has over the last 3, you never know. If you had had a cheque for $1000 in March you would have received approx £570, if you cashed it today you'd only get about £530. These figures are very rough but you get the general idea. Incidentally, I don't know what sort of company you're dealing with, but for a large company exchange rates are the cost of doing business - don't let them push you around too much!

jenniferpa

There are a couple of possible problems with the Paypal idea. 1) There is a receiving limit unless you have a premier account (£250). 2) if you have a premier account you'll incurr fees which may be more than your bank would charge (1.4% + £0.20 GBP to 3.4% + £0.20 GBP). There's also an exchange rate issue - it includes a 2.5% fee. So using the $1000 example you'll be paying £8 + at the very minimum without even considering the exchange rate.

Also, I don't think it looks terribly professional, but that's just a personal opinion.

VBK

Thank you for your replies. I guess I'll need to find a way to make the customer pay for the bank fees, as they are totally out of proportion. I cashed the cheque at Barclays the other day and they charge a minimum of 9 GBP. That's 12 % of the total value out of the window.
So much for encouraging global business...

lissa8

my boyfriend needs to cash a cheque and only has a credit union account . can he pay a cheque intp his credit union account as he doesnt have the i.d that the banks ask for for a bank account . would really apreciate any help.

Biggles

The main reason for not holding onto a dollar cheque would be that it might become out of date. The actual exchange rate is more or less where it was three months ago and indeed twelve months ago, the main fall in the dollar was during 2006-07; though any currency can change at any time and Sod's Law would suggest it would go against you.

For the future, you need to specify to overseas customers how they pay you (not when you bill them, but at the outset of the contract). Bank wire in GBP is probably the best bet as that should cost you anything and is probably the cheapest for the client.