Thanks for feedback , <br><br>Just planning to start voip business and regarding wire transfers here in pakistan, it takes time and I have to visit bank personally so just looking an alternative payment methods <br><br>Regards<br>
<br><div class="gmail_quote">On Sat, Aug 14, 2010 at 8:10 AM, Alex Balashov <span dir="ltr"><<a href="mailto:abalashov@evaristesys.com">abalashov@evaristesys.com</a>></span> wrote:<br><blockquote class="gmail_quote" style="border-left: 1px solid rgb(204, 204, 204); margin: 0pt 0pt 0pt 0.8ex; padding-left: 1ex;">
<div class="im">On 08/13/2010 05:16 PM, Bret McDanel wrote:<br>
> On Fri, 2010-08-13 at 17:04 -0400, Alex Balashov wrote:<br>
>> On 08/13/2010 04:49 PM, Bret McDanel wrote:<br>
>><br>
>>> It is weird that there is a higher processing overhead for a paper check<br>
>>> (cheque to people on other continents) yet that incurs no cost whereas a<br>
>>> wire has much lower processing overhead and its often much more<br>
>>> expensive. Almost like people in this country are being steered to use<br>
>>> the ACH system one way or the other.<br>
><br>
>> As a tiny company, we really can't afford to do it any other way, from<br>
>> a cash flow perspective. I'm sure there are many others here in the<br>
>> same boat.<br>
><br>
><br>
> That is a different issue<br>
<br>
</div>I agree with your points about ACH vs. wire. However, I don't think<br>
this is really a different issue, from the vantage point of the<br>
overall topic we're discussing.<br>
<br>
The cash flow constraints of (very?) small businesses often engender<br>
an experience of paper checks as a high-cost, high-overhead, high-PITA<br>
phenomenon in ways that are economically irrational from a purely<br>
quantitative perspective.<br>
<br>
But the incentives are very different with a small company than a<br>
midsize or large one. Larger companies don't really operate directly<br>
from cash; expenses are paid from revolving credit facilities or<br>
reserves, and in any case, without particular regard to cash income at<br>
any given moment per se. Revenue and expenses are somewhat abstracted<br>
from each other, rather than being tightly coupled in a time-sensitive<br>
way. Bills are paid and payments are collected on more or less 30 day<br>
terms, and sometimes much more than that, and from a financial<br>
governance perspective, accrual is what matters.<br>
<br>
So, it's almost as if the entire process of concrete money actually<br>
changing hands per se were a minor technicality, rather than a central<br>
theme of the company's ability to continue operating. Everyone will<br>
eventually get their checks in the mail, and the schedule on which<br>
that happens is largely a function of process and accounting people's<br>
workflow on both sides. Neither side is overly concerned about it, as<br>
long as the payment is made at some point within the required terms,<br>
in principle. The ability to keep the lights on isn't a function of<br>
the contents of the treasure chest except in the broadest sense possible.<br>
<br>
The point - and what makes it relevant to this discussion - is that<br>
the economics of transacting payment depend on who you're dealing<br>
with, and mainly their size.<br>
<div class="im"><br>
--<br>
Alex Balashov - Principal<br>
Evariste Systems LLC<br>
1170 Peachtree Street<br>
12th Floor, Suite 1200<br>
Atlanta, GA 30309<br>
Tel: +1-678-954-0670<br>
Fax: +1-404-961-1892<br>
Web: <a href="http://www.evaristesys.com/" target="_blank">http://www.evaristesys.com/</a><br>
<br>
--<br>
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