cheque-clearance

Vocabulary Word

Definition

'Cheque-clearance' is when a bank confirms if a cheque is valid and there's enough money in the account to pay it. It's like the bank making sure a written IOU can actually be paid.

Examples in Different Contexts

In retail business, 'cheque clearance' time affects how quickly businesses can access their revenue from sales made by cheque. A retail manager might note, 'We account for the cheque clearance period in our cash flow planning to manage our operational liquidity.'

Practice Scenarios

Accounting

Scenario:

I have recorded the details of the cheque but will post the transaction after the bank confirms the clearance.

Response:

Once the cheque-clearance is confirmed, I'll update the books accordingly.

Tech

Scenario:

Our new finance app has drastically reduced the time it takes for a user to have a cheque cleared.

Response:

With the cheque-clearance process being so simplified, users can have their financial transactions processed much faster.