Are Cheques Dying?

http://news.bbc.co.uk/2/hi/8414341.stm

Summary
Due to the steady decline of the usage of cheques, the board of the UK Payment Council has decided that by October 2018 all cheques should become obsolete. This means there should not be any scenario where a cheque would be needed. This plan will continue only if other forms of payment improve. The final decision will be made in 2016, after a progression check on other systems of payment. The obstacles standing in the way are that many small businesses, clubs, sole traders and schools use cheques as their primary form of payment and that many cheque users are uncomfortable with new technology. New technology that could possibly replace cheques would include contact-less technology and the usage of mobile phones to make payments.

Connections

A cheque is just a piece of paper on which you promise to pay the recipient. The flaw of this is the fact that it is merely a promise with no real value. A business can suffer losses if they receive a NSF cheque. However, the discontinue usage of these papers would mean businesses would have to turn towards other methods of payment, such as cash, credit or debit. The cons of other forms of payments are easily identifiable, carrying and transporting large sums of cash is both risky and unrealistic. Most credit and debit cards charge a fee every time it is used, both to the user and the receiver. This would lead to unnecessary expenses compared to using a cheque. Thurthermore, businesses with high expenses may not be able to cover all costs with their credit card limit. And the most significant disadvantage is the interest rates charged to unpaid amounts, either due to forgetfulness or to the lack of liquid assets. Lastly, the lost or theft of a card could do colossal damage to a company.

Reflection

I personally had never used or received a cheque in my 16 years of living; I do not plan to use one in the near future. However, I realize that most people receive their paycheck, as you can probably guess, in a form of a cheque rather than through direct deposit. Continuing, demanding that everyone learn the usage of new technology is cruel and unreasonable, some elderly people are used to only paying by cash, using a cheque may already be considered high-tech for them. I don’t believe we should discontinue the cheque. Even if only one person is using it, in a business point of view, they are still the customer, and refusing to accept it would only displease or drive them away.   However, a lot can and will change in 8 years, who knows, maybe in few years something innovative will change how we pay and receive money. 

Chapter 11- France - Oil Refineries = : (

http://www.bnn.ca/News/2010/10/18/France-taps-fuel-reserves-as-strike-continues.aspx

 

Summary:

This article talks about high numbers of workers in France going on strike. The workers are all striking against the same type of company, oil refineries. All 12 oil refineries in France has been affected. Gasoline and diesel has steadily decreased in amount because of the influx of demand. Petrol Stations are running out of fuel to sell. So far 1800 stations have a shortage of the product. The shortage has resulted in limits to how much fuel you can purchase and closure of stations at night. Diesel prices have increases by 8% while gasoline is up 14%. The ways that they are trying to improve the situation are to open up the nation’s emergency fuel reserve, which will only last up to 30 day or import the fuel from other countries. 

(Oil refineries process crude oil into petroleum products, which includes gasoline and diesel.)

Connection:

Freight-in was the clear connection to me. Freight-in is the cost of transportation on purchases. Transporting good usually consist of a truck. Many truckers drive at night to arrive at their destination sooner. In this situation, persons wanting to fill up their vehicle at night would not be able to do so, stalling the time it takes to reach the endpoint. They also make large trips, burning a great volume of diesel as they drive. With a limit on purchasing fuel, delivery wouldn’t be effective. On top of that, prices have been raised.  In these cases, money and time are both wasted. Freight-in by itself is not such a big deal, however, it can affect the “COGS”. If the delivery company is paying more to delivery your items, they will most likely send you the bill. The two choices you have are to absorb the price or give the burden to your customers. Both have their advantages and disadvantages. Absorbing the increase in price will ultimately lower your income. However, customer will not be put off by the sudden increase in price. Forwarding the cost to the customers may keep your profits the same, but customers may not be eager to buy or buy as much. Delivery Expenses will also be affected in the same way.

Reflection:

Although I truly believe that the usage of fossil fuel is slowing killing our planet, I allow realize the need to transport goods. France is experiencing something that I trust will happen one day. Oil will be obsolete. This day may not be soon, but oil will decline steadily. Everyone will be affected. It’s unreasonable and impossible to stop travelling by vehicles powered by oil. The prices will rise, and we will continue paying. Businesses will also be affected; freight-in and delivery will cost more and in turn the cost of the good will increase. They will most likely not make as much either because consumers are not purchasing or not as much.

Accounting @ School

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