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Streetwise Answers

When is an amount due to be paid actually deemed to have been paid. Is it :-

a) When the subby gets a Payment Notice from the MC or

b) The date for payment (if any) shown on that payment notice or

c) the date the money gets paid into his bank account so he has use of the money or

d) Some other date

If the MC pays by cheque again is it:-

a) When the subby gets the cheque

or

b) When the cheque clears and the subby can use the money or

c) Some other date


Let me start by giving you one definition of "cleared funds" and you will see why as you read on:

"A balance in an account that is able to be withdrawn or used in financial transactions. Until funds are considered to be cleared funds they are considered to be pending, and investors or customers will be unable to conduct transactions with them."

Turning that on its head the money isn't yours until it is "cleared funds" in accordance with your banks rules as to what constitutes "cleared funds".

Seeing the balance on an on-line statement for instance probably does not of itself make that figure "cleared funds."

So let me try and answer your question by repeating it below with my comments;

When is an amount due to be paid actually deemed to have been paid. Is it :-

a) When the subby gets a Payment Notice from the MC - DEFINITELY NOT! or

b) The date for payment (if any) shown on that payment notice - DEFINITELY NOT! or

c) the date the money gets paid into his bank account - DEFINITELY NOT! so he has use of the money ONLY IF IT IS CLEARED FUNDS! or

d) Some other date - ONCE IT IS CLEARED FUNDS!

If the MC pays by cheque again is it:-

a) When the subby gets the cheque - DEFINITELY NOT!

or

b) When the cheque clears - BE CAREFUL WITH TERMINOLOGY - THERE IS A DIFFERENCE BETWEEN WHEN THE CHECK "CLEARS" AND "CLEARED FUNDS"! and the subby can use the money - ONLY IF IT IS CLEARED FUNDS! or

c) Some other date - ONCE IT IS CLEARED FUNDS!

Clearly the actual date that payment is received could be crucial in matters such as suspension etc. So, be sure to check the terms of the contract. If in any doubt give us a call during office hours on 01773 715062.

 


Posted by: barryashmore - Return

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