3 Things to Remember When Hiring a Chartered Bus

Travelling by chartered bus is great way to save money and to relax on long road trips. By leaving the driving to a professional bus driver, passengers can sleep or chat (even check their email!) and arrive at their destination fresh and full of energy.

Safety

If you are considering hiring a chartered bus, make safety your number one criteria. The highway system in the United States has over 170,000 miles of interstate roads with varying degrees of complexity and in different conditions. Make sure your driver has the experience and the knowledge to maneuver a 10-ton bus through these roads.

For long or quick-turn-around trips, bus companies are required by law to provide an extra driver for the journey. Ascertain that the charter bus company you are considering follows this regulation before hiring them.

Compliance

The bus industry is highly regulated. Before they can cross any state or provincial line, motor coach companies need to have federal operating authority. They should also carry current liability insurance of up to $5 million dollars. Furthermore, federal law requires all U.S. based buses to undergo an annual inspection for regular maintenance and repair and also to determine road worthiness.

A reputable and trustworthy charter bus operator will not hesitate to provide all of this information. Do not deal with any company that fails to show proof that they are in compliance with the rules and regulations governing their industry. If you do come across such an operator, consider reporting them to the American Bus Association (ABA). Shady operators should not be allowed to have their buses on the road where they can put the safety of other vehicles and their passengers at risk.

Quality

Finally, chartering a bus should also be about enjoyment. Research the bus companies that offer the features that will enhance the journey for you and your co-travelers. Does your group need a Wi-Fi environment onboard? Extra leg room? Bilingual drivers? Take a poll and make a list. Then be sure to ask the bus operators what they have to offer your group.

Charter bus companies have come a long way since the 1960’s when they first offered specialized travel in an attempt to lure more bus-riding passengers. Even if no single bus company will have everything on your list, it never hurts to ask.

Finally, ask for the bus company’s DOT number. You can use this number to search for the carrier’s safety record online.

The romance of the road beckons especially during the summer months. By doing diligent research, you can charter a bus that will bring you to your destination of choice safely, conveniently, and in style!

Preparing To Travel a Long Distance By Bus

Bus journeys are always a memorable affair. There is no other mode of transport that can beat it. The reason that this long standing love for bus transport has been there is attributed to the convenience and ease that bus travel offers. Long-distance travel is not as bad when it is done by bus. A long-distance journey can be made easier when an effective planning is in place. Here is a list of things to tick off when planning a hassle-free journey by bus:

Booking Tickets
Don’t just be in a rush to purchase tickets as soon as you’re sure you would be travelling. Do your research first. Take some time to analyze and compare the different bus service companies. Be clear about what standards of travel you cannot feel comfortable without and make sure the bus company you choose offers all of them. For example, if you cannot travel in a non-air conditioned bus, or one that has compact seats with not enough leg room, don’t make a compromise while planning and tell yourself that you can. Long distance travel is exhausting as it is, and not making sure of your comfort can most certainly put you in a bad spot. Once you’re clear on your budget and comfort levels, book your tickets. Be precise, speak clearly and reconfirm information before you hand over the money to book your ticket. When you’re booking bus tickets online, there are many incentives that are offered by various private bus companies. These include various discount travel coupons and promotional codes that are often made available by them. Make sure to go price shopping before booking your ticket.

Selecting a Seat
Selecting a seat is an extremely important step when travelling by bus. If you’re susceptible to motion sickness, make sure you take a seat in the front or in the middle. Females travelling alone and older people should sit as close to the front as possible. It is safe, and more peaceful. If you’re planning to catch up on some sleep, front seats should be preferred.

Preparation and Baggage
Start your journey with a good state of mind. Bring enough means of distraction (books, magazines, an iPod with your favorite songs, etc.). These will make your journey fun. When travelling by bus, a person’s baggage is stowed either underneath or on top of the bus. So it is imperative to make sure your stuff is secure. Lock your bag properly and never leave your valuables in the bag that is to be stowed away. Always carry these valuables in a hand bag that will remain with you at all times. In case you are under some medication, keep your medicines and other necessities in your handbag. Keep plenty of food items and water to keep you nourished and hydrated.

Be Secure
It is important at all times to be safe and comfortable. Dress conservatively and comfortably. Do not attract undue attention. Be wary of strangers and when travelling alone, do not converse with people who you feel can land you in trouble. It is advisable to chat up with someone on the bus that this helps you stay informed. Generally older people and couples who are warm towards strangers and look out for them during the trip too. Make sure you inform family or friends about your travel plans. Know your route well before travelling.

Enjoy the Scenery
Travelling by bus offers the best way to admire the countryside. Take out time to enjoy the interesting sights and sounds that will greet you when you’re travelling. A bus travel has forever been romanticized and regarded as the best method to enjoy a relaxed trip. The sights and sounds that trot along with the many benefits of a bus travel service are unmatched and cannot be copied in essence by any other mode of transport. A bus travel always makes up for an interesting story.

Enjoy Partying at a Whole New Level With a Party Bus for Hire

Name a party that you want to have and you can all do it with a party bus for hire. You can unwind from a hard day’s work if you enjoy yourself in parties once in a while. At other times, you also want to try out something new and have more fun doing fun activities with friends and family. Typically, when you want to celebrate a certain event, you would normally rent the venue for the party or celebrate it at home. Private vehicles and vans cannot accommodate all the invited guests at once. A trip would be more enjoyable if you can be all at the same vehicle and everything you need is already there. Here are some fun ideas to do when you get to have a party bus for hire.

The night is still young and you might be already tired of partying at the same club. With a party bus, you can continue on partying at the bus with your friends while heading out to the next club. The fun never ends and you also get to meet new people as you do the club hopping. If you had too much alcohol, all you need to alleviate your drunkenness are also in the bus. Aside from that, the bus is operated by well trained individuals ensuring your safety while you and your friends enjoy the party.

You can also celebrate a love ones special occasion on a party bus. May it be a birthday party or a bachelor/bachelorette party; you will all have a good time together on the road. Aside from that, you get to visit places, watch sporting events and get to enjoy the scenery along the way. All you need to do is just enjoy yourselves and the rest will be taken care of by the party bus employees.

Most party bus companies have different buses with different kinds of amenities. Of course, you will be able to get to choose the kind of bus which is suitable for the party that you want to celebrate there. Some of these amenities include karaoke machines, excellent sound systems, neon lights, private toilets separate for men and women and a lot more.

You can try something new once in a while and explore other ways of having fun. One way of doing so is getting to have a party bus for hire to celebrate good times with friends and family. Also to maximize the rental you paid for the bus, it would be best to maximize the amount of people you invite to come with you. More guests to celebrate a party with, the more fun it will get. That way, the cost for the party bus will definitely be worth it.

Wedding Party Planning Do’s and Don’ts

There is certain etiquette when it comes to planning a wedding party (or wedding shower). The established guidelines are not laws that must be followed (or suffer the consequences). They are just a set of helpful considerations one can contemplate during the planning stages of a wedding party.

Here are some helpful tips to guide you through your planning:

DON’T: Wait for one of the bridesmaids to get a party together.
DO: Host it if you want to.

If you really want to throw a party for the future bride and groom, go right ahead. There is a common misconception about the bridesmaids being the ones who should host the party. Any friends of the bride or groom are more than welcome to host the party.

DON’T: Schedule the party to take place within a month of the wedding.
DO: Schedule it to take place two to three months before the wedding.

The reason for this is pretty obvious. This is a courtesy to the bride and groom. They both (let’s be honest, it’s mostly the bride we’re talking about) have a lot to take care of in that last month before the wedding. They probably won’t be able to enjoy themselves as much when they’re thinking of everything they need to get done before their big day.

DON’T: Invite anyone and everyone to the party.
DO: Invite anyone who’s on the wedding guest list.

A word of caution, it’s okay to invite anyone you’d like off of the list of those invited to the wedding, but don’t invite everyone from it. Try to keep it to the bride and groom’s closest friends. If you invite everyone, it might seem like some sort of gift receiving power struggle.

DON’T: Wait until the last minute to send out the invitations.
DO: Send out your invitations at least a month before the party.

If you wait until the last minute to get this step taken care of, chances are there will be problems. Mainly, people won’t be able to attend the party because you didn’t give them enough time to make sure their schedules were clear. Waiting too long also gives them that much more time to plan something else for that day. Get your invitation to them early enough so they can reserve that spot for your party.

This wedding party planning etiquette won’t ensure that absolutely nothing will go wrong, but keeping these do’s and don’ts in the forefront of your mind will give you a great chance of throwing a nearly perfect wedding party that the bride, groom, and friends will remember fondly.

Planning a Wedding Party You Won’t Forget

A wedding party is the event where your friends and family all gather together to celebrate the newly weds and have fun and pleasure. Pitting down hair and throwing away your tie is what usually happens during the party, and there is nothing more pleasurable than this moment. However you will need to make sure that all these things go well and smoothly prior to the party taking place, therefore carefully considered party planning is very important. Planning a wedding party is unlike planning any others. The amount of time taken into consideration and carefully chosen details are the core factors that will decide the quality of party after all.

You need to consider a few things that go into party planning to celebrate a wedding. First of all, think of how many and what kind of people will attend. The group of people after the ceremony will most likely be divided into several different groups, such as older people, young generations, men of 20s and women alike. Also bride and groom can have fun time with their own friends group separately. But you can mix any group in the party until a certain time when older folks can be free to leave if they want. Considering who will be belonging to which group is vital to planning ahead, thus providing them more comfortable and cozy environment while enjoying the entire party.

The best wedding party would be that everyone feels they are considered, well taken care of and finally they had wonderful time. Another thing to be considered is the venue. Depending on the weather condition, and the time and the season of the year, you can either go outside or have it indoors. If it’s outdoors then make sure the weather condition and prepare shelters for unforeseen circumstances. Compared to it, indoors party is easier as it is not mainly dependent on the weather that much. Also the place of venues should be attractive one where people can feel comfortable and relaxed. When there are alcohol beverages involved in the party, make sure underage children’s permission and restriction. It is important that the entire environment is conductive all the people at the party regardless of their ages.

Arrange a live band who can drop a great music tunes on the dance floor as all the people would want to have fun all night. In addition to the entertainment, the food would be another factor that people are seeking. Just getting enough cakes is the best way to go. Also don’t forget to prepare best soft drinks and champagne as the party won’t be ever complete without a toast from friends wishing the newly married couple. If anyone wants to speak and congratulate in public, give them a chance and it will become unforgettable moment for all.

4 Tips For Your Unique Wedding Party

One of the most important things to take care during the wedding planning, you should always consider all aspects of an enjoyable wedding party.

Since you will be spending this not just with your soon to be lifetime partner, but with your closest friends and family as well, you have to think of the most unique wedding party ideas there is available.

The wedding parties get to be more memorable because of the souvenirs that your guests get to take home after the momentous event.

Hence, here are some unique wedding party ideas that you can apply in your own wedding to make things more impressive and interesting to everyone.

Idea # 1 – Food:

If both of you are food enthusiasts, then you can send out adorned, printed out files wherein the recipes of the menu served during the party is laid out, to all of your guests so that they can try it on their own.

Idea # 2 – Wine:

Encourage everyone to start their wine cellar by giving away bottles of wine as souvenirs.

You can even hold a contest for those who would be able to tell an interesting story that brings back wonderful memories about the wine.

Idea # 3 – Advice:

Set a sort of open forum during the wedding party, wherein you would give a chance for everyone to give their own advices to you and your partner to be able to live a lasting marriage after the wedding.

Gather up delightful stories that others can say about you and your partner with the help of a friend who has the time to go around and meet your friends and special loved ones.

Idea # 4 – Community Bonding:

This could also somehow serve as a pre-wedding party wherein you would take your other couple friends out and play sports together like bowling, golf, tree adventure, etc.

Have an enjoyable meal with your family and friends and talk about topics that would help improve your relationships.

Keep it in your mind that these unique wedding party ideas are not just meant to make the wedding couple alone to be happy, but also to add entertainment and enjoyment to beloved guests.

The bride and the groom should take this opportunity to value these people as their future relationship supporters and advisers as the couple would embark on a whole new journey of their lives.

There are some more options that you can find over the net to find some unique wedding party ideas.

A “Less Narrow” Narrow Banking

Ultimately the “correct solution” to the US’s banking troubles are not going to come from a simple return to narrow banking or a switch to macro-prudential banking either. While macro-prudential banking looks in its early stages to be working in Columbia and Spain, it has no proven success in an advanced economy to this point, and its reliance on data and data analysis is fairly dangerous. While of course new is not always “bad,” when dealing with the American economy I think it is essential to start off with a system that has been proven to work soundly, and then implement smaller reforms on this system to make the system work even better. Research has shown that macro-prudential analyses were unable to detect the subprime crisis because it was not the “common bank crisis”. Additionally, there is always a tendency for the authorities and those conducting the analyses to get caught up in the same sort of optimism as the private sector, and this could be especially prevalent in a society as driven by wealth as the US’s. On the other hand, simply narrow banking (completely separating commercial and investment banks) has been shown to be restrictive on both the commercial and investment sector and would thus lower potential economic growth. The “too big to fail” proposal, while it has many positive aspects, really seems like an answer to only part of the problem.

The top solution I believe will take aspects from all three, and the banking solution I propose does this to some degree. Narrow banking- when done correctly- has worked very well in the past for the American economy: From post-WWII up through the late 90’s, the US was essentially void of any long (1+ year) recessions, outside of those due to extreme jumps in oil prices (rise in OPEC oil prices in 1973 along with Vietnam spending and also 1981 with jump in oil prices due to the Iranian Revolution). This was while following a strict narrow banking strategy as imposed by the Glass Steagall Act. As a reference, prior to the implementation of narrow banking there were over 10 recessions of 1+ year in the US in the previous 100 years (including a number that lasted over 2 years). With less enforcement of the act in the 1990s and finally the repeal of it in 1999, investment banks quickly began playing the role of commercial banks and taking on deposits, and commercial banks began selling off their deposits as investments. Quickly this led to the worst financial crisis in the US since the Great Depression. However, it is important to remember that while the financial crisis did emerge from the mixing of banking roles, extreme economic growth occurred initially. The best solution should seek to embrace this economic growth while preventing large financial crises that can stagnate it. My proposal plans to follow a “less narrow” form of narrow banking that will be less restrictive on banks while keeping a closer eye on their actions, less reliant on data analysis, but prevent the devaluing of assets from bringing down the entire financial institution, thus keeping the number of 1+ year recessions at a minimum.

– The first reform to implement is a simple restriction on the size financial institutions are allowed to grow to relative to the whole system. When one bank gets too intertwined in the affairs of all other banks and is essentially “too large to fail,” this can be a huge problem and have market-wide implications. Restrictions on the percentage of market assets held by any one financial institution need to be implemented to prevent the dependency of an entire economy on this single institution. Banks will still be able to continue growing, just not at a significantly faster rate than the rest, and this will essentially eliminate any sort of monopolization inside the banking sector. While this can eliminate the possibility for economies of scale, it will also prevent them from making risky decisions, knowing that the government will be forced to bail them out if they do indeed fail.

– A clear distinction must be made between investment banking and commercial banking, just as with the Glass Steagall Act. Investment banks must be in no case allowed to take on deposits of their own. Commercial banks must be restricted from selling off their deposits as assets, outside of Prime, low risk mortgages. Requiring commercial banks to hold onto all but the most risk-free mortgages will as an incentive for them to not let the mortgages default. They will only give out mortgages to credit-worthy customers if they must bear the burden of a default. In my proposed strategy, all assets would fall under 3 “tiers” according to their riskiness. Tier 1 would include low risk highly liquid assets, tier 2 less liquid and more risky assets, and tier 3 the highest risk and least liquid assets. The basics of each tier are outlined in the table below:

Tier 1 MMMFs, Treasury Bills, Certificates of Deposit, Gov’t Bonds, Euro debt securities

Tier 2 Corporate Bonds, Preference shares

Tier 3 Debentures, Corporate stocks, credit card debt, derivitives, triple A securities (rated by Fed)

– In this proposed model, investment banks would be allowed to invest in all 3 tiers. During times of market efficiency/stability, commercial banks would be limited to investing in tier 1 assets. Close regulation of the financial system (as in macro-prudential banking), would be put into place by the Fed to closely monitor market-wide risk, and based on this risk commercial banks would be permitted to invest in Medium risk (tier 2) assets depending on the financial conditions- during times of recession tier 2 assets will become available for commercial investment, and during booms the availability of investment in these assets would close off. But because in this model investment banking and commercial banking will be largely separate, a failure of the Fed to correctly predict the risk in the market will not result in a possible crisis as in pure macro-prudential economy.

– Because commercial banks and mortgage companies will have to hold onto their mortgages and other loans, they will continue to only give loans to credit-worthy borrowers since they themselves will face the problems of creditworthiness rather than the investment banks and other customers of MBS’s. In any recessions the Fed will advise banks to lower their credit standards to help jump-start the economy- during booms the opposite will occur and the Fed will advise banks to tighten their lending standards. The model will require the Fed to closely monitor that banks are not selling off these loans, but aside from that their will be no incentive for banks to raise/lower standards against the success of the economy since they alone will feel the effects of a loan defaults.

Loan Files – Automation Through Digitization at Banks

With recent technological advancements in the financial industry, banks throughout the United States (and the rest of the world) continue to search for tools to optimize traditionally manual processes. With administrative costs comprising such a large portion of a bank’s annual expenses, banking software systems that provide effective automation will continue to experience solid growth for decades to come. A major trend among banks is the automation of loan files. As any banker knows, a single file can represent mountains of paperwork and possibly years of work. This article takes a look at the ways banks are using bank imaging technology to streamline the management of loan and credit files.

Questions For Consideration

Before considering your options for loan file automation, it is wise to first review some basic questions about your bank’s current situation. By thinking critically about your bank workflow as it stands today, your financial institution can maximize return on investment. The following questions may be helpful when starting the process of optimization.

How efficient / effective is your current paper loan file system?
How much money does your financial institution spend each year creating and organizing physical files?
How frequently do physical files have to be transferred from one branch to another?
Things to consider: courier costs – routing for credit analysis, approval officer review, etc
Has your bank every misplaced, damaged, or completely lost a loan file, creating mountains of duplicate administrative work to restore the original files?
Have customers or lending officers ever complained about the length of time it takes to approve or update loan files at your bank?

Loan Approval Process: A Very Good Place to Start

Once you have identified the need to automate your loan process, a wise place to begin is at the very start of the application process. By implementing a banking software system that can manage your loan files from start to finish, your organization will yield the greatest ROI from such a platform. When evaluating the offerings from different banking software companies, it is a good idea to find a system that will integrate with your existing applications, underwriting software, credit analysis platform, and documentation. It is also important to find a system that will provide up to the minute loan status information, electronic routing, and multi-party document viewing rights. Through automated updates to the assigned user, loan status, and approval status, your bank will experience formerly unrealized economies of scale.

Optimizing Your Bank’s Loan Pipeline

With the volume of loans being processed each day in a single bank branch, keeping up with the status of each paper loan file has historically been a challenge for institutions of all sizes. When implementing bank loan software to centralize such activity, it is crucial that your bank select a banking software company that offers a loan pipeline management and reporting tool. Such tools typically offer a customizable dashboard for instant analysis of a bank’s existing loan pipeline. In addition, such platforms should provide a wide variety of reporting options, allowing users to subscribe to email alerts for specified pipeline activity. Also, reports should have the ability to be easily exported to the standard formats, such as.pdf and.csv, allowing deeper analysis by management.

Customize Loan Files for Your Bank Workflow Needs

Perhaps the greatest benefit of automating loan files via bank management software, is the ability to quickly glance at the entire documentation workflow and instantly understand which documents are still missing. As documents are routed from user to user through your bank workflow, users can be automatically notified via email that their action is required. When choosing a banking document management system to streamline your loan filing, it is vital that you go with a vendor that allows you set up unlimited workflow actions in your system. By customizing every workflow action to your bank’s needs, you can ensure that your system will reflect the operational goals of your institution. Such elements to consider in your workflow automation include: managing exceptions, defining user groups, email notification recipients, setting lending limits, etc.

Closing Thoughts – Loan File Digitization

By automating the approval and life cycle of a loan file, your bank can reap significant benefits. Studies have shown that many financial institutions are able to recoup their investment in loan portfolio management software within a twelve to eighteen period. By digitally capturing every action associated with a loan file, banks have been known to save money in the areas of administrative costs, courier / overnight shipping expenses, storage space, and overall productivity.

How Banking Systems Originally Started

What is a banking system? It seems like a simple question. However, depending on where you sit and your personal perspective there can be several different answers.

When I pose this question to participants on my courses I invariably get an answer that deals exclusively with a computerized process. In today’s jargon the word “system” seems to automatically refer to a computer and a computer only.

However a “system” is bigger than just a computer. A “system” is a grouping or combination of things or parts forming a complex or unitary whole. An easily understood example is the postal system which includes things like letters, stamps, parcels, letter boxes, post offices, sorting offices, computers, clerks, mailmen, delivery vans, airlines; just to mention a few of its components. It is how all this is organised and made to work that makes it worthy of the title “postal system”. So, when we speak of a system, we speak of something much larger and more complex than the computerized part of that system.

The same logic relates to any other “system” and “banking systems” are no different.

The cheque clearing system (or check clearing system to our American cousins) can probably lay claim to the honour of being the oldest banking system in the world. This system, with variations, is used to this very day in all countries where the cheque still forms a part of the national payment system.

Today in the twenty first century, in most countries where the cheque is still in use, the cheque clearing system is a highly sophisticated process using state of the art technology, readers, sorters, scanners, coded cheques, electronic images and lots and lots of computing power.

The cheque is basically a humble piece of paper, an instruction to a bank to make a payment. The story of the cheque clearing system is a story that is worth telling. It is that story of a banking system that is now in its third century of operation. It is the story of a banking system that has evolved and changed and been improved through countless innovations and changes. It is a story of the key payment instrument that has helped grease the wheels of commerce and industry.

How did the cheque begin? Most probably in ancient times. There is talk of cheque-like instruments from the Roman empire, from India and Persia, dating back two millennia or more.

The cheque is a written order addressed by an account holder, the “drawer”, to his or her bank, to pay a specific amount to the payee (also known as the “drawee”). The cheque is a payment instrument, meaning that it is the actual vehicle by which a payment can be taken from one account and transferred to another account. A cheque has a legal personality – it is a negotiable instrument governed in most countries by law.

To illustrate let us use an example. Your Aunt Sally gives you a present for your birthday. A cheque for one hundred pounds. To get a hold of your real present (the cash that is) you have two options. You can take yourself off to Aunt Sally’s bank and claim payment in cash by presenting the cheque there yourself, or you could give the cheque to your own bank and ask them to collect the amount on your behalf.

Collecting your present in person can be a real bind, especially if Aunt Sally lives in another town, miles away from where you live. So you deposit your cheque with your bank.

Cheque clearing is the process (or system) that is used to get the cheque that Aunt Sally gave you for your birthday, from your bank branch, where you deposited it, to Aunt Sally’s bank branch and to get settlement for the amount due back to your own branch. Given that on any one day millions and millions of cheques are processed, sorted, processed, transported; getting payment for and keeping tabs on all of these items is no easy feat.

A year or two back the annual number of cheques processed in the United Kingdom was just over five million. Not per year but PER DAY!

However, we are digressing. We need to get back to our story, now unfolding almost two and a half centuries ago. Until about 1770 the collection of cheques in London, which by then had already become the world’s premier banking centre, was pretty much an informal, tedious affair. Each afternoon clerks from each of the dozens of London banks would set out with a leather bag tucked under their arms. In the bags were the cheques that had been deposited with their banks drawn on all the other London banks.

They would trudge from one bank to another, through rain and through mud, in summer and winter. At each bank they would present the cheques that had been deposited with them for collection and would receive in exchange cash payment for the items presented. When necessary they would also take delivery of cheques drawn on themselves and deposited at these other banks, keeping a tally of balances between them and the other bank until they settled with each other. This dreary exhausting trudge from one bank to another would often take the best part of each afternoon. On their return the cash received in payment of those cheques would be balanced up. Life was indeed hard.

And then it happened! A spark of innovation flashed across the mind of one of those weary clerks. Who it was, is not known, but he had a real brainwave, probably driven by thoughts of how to boost his leisure time or settle his nerves with that extra pint of ale.

The logic was simple. If the clerks could all meet at a set time at a single place, they could transact their business, each with the other in a fraction of the time and without the need to walk miles and miles to dozens of banks. They started doing this by arranging to meet daily at the Five Bells, a tavern in Lombard Street in the City of London, to exchange all their cheques in one place and settle the balances in cash. In the spirit of the efficiency gained they could maximise their leisure and drinking time – which they promptly did, much to the satisfaction of the local publican. An added benefit was that all this now happened out of the cold and the wet and the gloom.

The cheque clearing system had been born.

There were other benefits to be gained from this new system too. By having all the banks present at a single exchange session permitted interbank obligations to be settled on a multilateral net basis. This provided a huge savings in the amount of cash that each of the clerks had to carry to settle his banks obligations.

Pretty soon the next innovation kicked in when the banks dispensed with settling in cash. This was replaced when the banks set up a process of exchanging IOUs drawn on their respective accounts at the Bank of England, for the net amounts payable or due. The IOU was called… you guessed it; a clearance voucher.

In the next two hundred years the process or system was replicated around the world as the only method for the collection and settlement of cheques, which at that time was the only domestic payment instrument.

Different countries adapted the system with minor variations. However the principal remained the same. While the various systems operated beautifully in terms of operational and technical efficiency, the legal risk in the netting process was neatly ignored. This lacuna was only corrected in the 1990s with the realization of the systemic risk that this gap had created.

The nineteenth century saw the previously handwritten cheques being replaced by printed forms issued by banks to their clients, often embodying some form of security feature to hamper attempts at forgery.

Nothing much changed until the 1960s and 1970s when automation was introduced into the cheque clearing system. Growing volumes of cheques around the world necessitated new ways to process the flood of new payments being made. During this period we saw a proliferation of automated clearing houses in which machine-readable cheques were processed, sorted, batched, cleared and settled. The method used for this was the code-line printed on the cheque, either in magnetic ink (MICR -Magnetic Ink Character Recognition) or using a special font (OCR – Optical Character Recognition).

Subsequent innovations have seen this data being transmitted electronically from bank to clearing house and then to the bank again. Images of the cheques are now also regularly transmitted between banks. In many jurisdictions the digitized image of the cheque has become the legal replacement of the original paper cheque allowing the paper instrument to be truncated at source.

Despite the growing popularity of pure electronic payments in many parts of the world, the use of the cheque still remains popular in the United States. Perhaps the ultimate accolade to the durability of the cheque and the cheque clearing system is the fact that many American banks today allow their customers to photograph their cheques, using a bank developed app, for deposit via their smartphone. The cheque image, both front and back, is transmitted to their bank for credit of their account.

This original banking system has certainly come a long way in two and a quarter centuries since the first cheque clearing house began its operations in a room at the Five Bells Tavern in the City of London, as a smart idea to give a bunch of young bank clerks more drinking and leisure time, out of the cold and the damp.

Control With Bank Reconciliations

Reconciling the entity’s accounting records with those of their bank provides an important control over banking transactions and confirms the bank balance disclosed in the statement of financial position. The bank statement is, in effect, a copy of the bank’s ledger account reflecting transactions from the bank’s standpoint. This statement, while not infallible, is a useful independent source of information against which to check the completeness and accuracy of the entity’s information on its banking activities.

Bank statements record all deposits by the customer as credit entries and all withdrawals as debits, reflecting the bank’s view of these transactions. Deposits by customers are liabilities (credits) of the bank, and withdrawals are either reductions of these deposits (and hence debits) or are advances by the bank, which constitute assets of the bank (debits). Hence all transactions will be recorded as ‘mirror images’ (with opposite signs) by the entity and the bank.

Furthermore, the timing of entries will differ, making it unlikely that, at any given time, the balance in the general ledger account will be the same as that on the bank statement. Each entity records transactions as it becomes aware of them, for example, on receipt of a customer’s payment or on drawing a check on settlement of a supplier’s account. The bank entry will be triggered by presentation of the item at the bank – as part of a (combined) deposit of customer payments, or when the supplier presents the check or payment (via their bank).

In addition, some entries will be made by the bank before the client entity receives advice of the transaction. Examples are bank charges and interest, automatic payments (APs), direct debits (DDs) and direct credits (DCs), where customers pay by bank transfer rather than by mail or in person. Automatic payments require the payer to authorize varying amounts, whereas DDs (and DCs) allow variations in amount, subject to the right of cancellation.

The reconciliation procedure is as follows:

1. Compare and tick off each matching pair of:

(a) Deposits and direct credits in the bank column of the cash receipts journal with amounts in the credit column of the bank statement ensure dates are compatible

(b) Checks drawn or auto payments recorded in the cash payments journal with checks presented in the debit column on the bank statement (ensure checks numbers or details of auto payments agree).

2. Adjust the entity’s records for omissions or errors:

(a) Enter omitted (unticked) items on the bank statement into the appropriate cash journal: (i) Credit items on the bank statement are entered in the cash receipts journal. These are deposits (a liability of the bank to its customer), for example, direct credits or interest on savings. (ii) Debit items on the bank statement are entered in the cash payments journal. These are withdrawals that reduce in-fund balances (or increase overdrafts). Examples include payments under auto payment or direct debit authorities, or interest and fees charged by the bank.

(b) Correcting journal entries may also be needed where amounts have been initially entered incorrectly in the journals. In practice it is necessary to check from original sources which entry is correct – the bank’s or the entity’s record.

3. Adjust the balance on the bank statement for any items not yet recorded by the bank – for example, deposits in transit and unpresented checks at the date of the statement; or any errors in the bank’s recording process.

4. Prepare the reconciliation. This takes the form of a statement prepared as at a certain date, starting with the bank statement balance – the independent amount – and adjusting it for any deposits not yet credited (outstanding deposits) and any checks not yet debited (unpresented checks).

This procedure confirms the accuracy of the recording process and the existence of the funds, as confirmed by the bank. Note the use of in funds (I/F), or O/D if overdrawn, to avoid the confusion of using Dr or Cr, which have differing meanings on the bank account and on the bank statement.

To gain maximum benefit from this control, organizations should obtain bank statements regularly, and ensure that the bank account (in the general ledger) is compared with the bank statement and any differences adequately explained and followed up. The frequency depends on the volume of transactions and the reliability of other controls, but it should be carried out at least monthly.

Bank reconciliations must be carried out on a regular basis, especially with the large number of electronic transactions that are now first recorded on bank statements. In addition, reconciliations provide a strong control over cash handling (for example, by high lighting any delays in making deposits), as well as providing assurance that the entity’s accounting records are reliable.