Evaluation of Payment System...

 CASH Payment:

A form of liquid funds given by consumer to a provider of goods or services as compensation for receiving those products. In most domestic business transactions, a cash payment will typically be made in the currency of the country where the transaction takes place, either in paper currency, in coins or in appropriate combination.

Advantages

1.  Instant money in hand, except taxes of course.
2. There are no transaction fees with cash like there are with credit cards
3. Minimizes bookkeeping, which means less stress & less hassle.

Disadvantages

1. Money in the drawer can be tempting for some employees to steal.
2. A safe needs to be on safe or frequent trips to the banks for deposits must be made, which takes time and money.
3. Money at your location increases your risk for theft not just from employees but criminals as well.

CHEQUE PAYMENT

A cheque is negotiable instrument instructing a financial institution to pay a specific amount of a specific currency from a specified transactional account held in the drawer's name with that institution. Both drawer and payee must may be natural persons or legal entities.

Advantages

1. It is more convenient than carrying cash.
2. Payments can be stopped if necessary.
3. Cheque are safer when crossed.
4. One does not have to count notes and risk making counting mistakes.
5. They can be traced if lost.
6. They can be post dated.

Disadvantages

1. Cheques are not legal tender and other creditors may refuse to accept them.
2. They may be valueless if the drawer has no funds in his/her accounts.
3. Cheques are not suitable for small fund amounts.
4. Bank charges are levied on cheque book &  dishonored cheques.