Starting July 1, 2007, we all in Canada were supposed to use new, CPA compliant cheques. Banks will be processing cheques electronically, without passing physical paper cheques among branches or back to the customers.
To allow for electronic scanning, Canadian Payments Association mandated certain areas of interest on cheques must meet new standards.

Your old cheques will no longer be valid. However, due to delays with this project’s implementation, we are getting a grace period. The new date is slated in second half of 2008, and you can still use your current supply of cheques. All new cheque orders after July 1st, however must be CPA compliant.

Changes include new, digital format of date field and label, obligatory numbering, larger area reserved for MICR printing only, standardized positions for key information and mandatory pre-prints on the back of the cheque.

For the latest specifications of the new cheque format you can visit site of Canadian Payments Association at www.cdnpay.ca .

What all this means to a small business or selfemployed person? It not only means that you need to order new cheques pretty soon, but also you need to verify that your accounts payable software is ready to print such a new standard cheques. If you postponed to update your software for a few years – you will be probably forced to do it now.
New (2007) versions of Quickbooks and Simply Accounting are compliant with this standard. In Accpac you can change your cheque template – so experimenting with the printouts may do the trick.
Users of customized accounting software are out of luck if programming support of these companies does not exist any more or is not ready.

Independent payroll software providers, like Easypay.ca are ready since last year, and allow users to print either old or new cheque format.

Canada is not the only one improving technology to process cheques more efficiently. Countries like US, Singapore, Portugal, Spain, Hong Kong, United Kingdom and New Zealand are running advanced implementation of similar projects.

Cheque imaging will enable financial institutions to offer new products and services to combat signature forgery and cheque alterations. Did you know that 12 billion dollars is lost yearly in fraudulent cheques?

How can you protect yours? Here’s a quick checklist of anti-fraud protection practices:

Procedures:
• Separate responsibilities to write/reconcile cheques
• Treat negotiable documents as cash
• Conduct private, periodic security reviews
• Limit the number of official cheque signers

• Use tamper-apparent packaging
• Use serial number on documents

Practices:
• Lock up valuable documents and processing equipment
• Centralize cheque writing
• Use audit programs

Cooperation with bank:
• Reconcile cheques promptly and look for alterations
• Use bank on line reporting/reconciliation
• Protect and shred account references

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