While living and working in Edinburgh in 2008 I set out to write one million words in 366 days... but only managed 800,737.

Thursday, July 31, 2008

One Penny Blues

I don't really talk about my day job here because I don't find it that interesting and there's no way any of you would.


Today someone issued a cheque for £0.01. Uh huh, one whole penny. This is stupid in itself, but the only reason I saw it was the person who issued the cheque did the banking incorrectly. (It falls on me to tell people when they've screwed up and explain how they can fix things.)

This particular penny was to settle a customer complaint. I can only guess there was a one penny discrepancy on a payment -- just who complains about this is something for a different rant. What troubles me is that someone at my multinational industry-leading financial services institution saw no problem sending out a cheque for this amount and that two senior staff signed it. What were they thinking?

Who's going to cash a £0.01 cheque? Even if the bank doesn't charge you anything to deposit a cheque, there's the good old "shoe leather costs" (yes, I still remember my Economics 101). What will happen is the cheque will go unpresented. After six months it will go stale and will need to be moved into an out of date account. After six years the penny can be returned to the company.

You may be thinking this is a devious plan on the part of my multinational blah blah blah company to "pay" compensation without actually having to part with a single penny, literally.

Devious would not be the word for it.

The cost of sending out this cheque in terms of labour (writing check, senior staff signing it, posting it, doing banking, suggesting corrective banking [my five minutes of fame], doing corrective banking, doing out of date banking, doing banking to return the penny to our account) runs to £8.20 in my very cautious estimate. When you add the cost of printing the cheque and posting it, and the cost of investigating the initial complaint, the company is down around £30.00. That's 2999% more than if we'd just paid out the correct amount in the first place.

Maybe those years in the public sector background heightened my Ridiculous Radar (anything that can end up as a newspaper headline is to be avoided). But in the private sector, and banking in particular, it seems they’re willing to trade pennys for pounds.

That’s the problem with institutions, I think. Virtually every task is immaterial when the bottom line is in the billions.

Hardly an original thought, I know. But that’s kind of the point. I am a temp. Work is not setting my world on fire. It’s hard to switch gears at night and be creative. It’s hard when a one penny cheque will make more ripples than a 1,600 word story. Sometimes it’s just easier to blog about that cheque and get an early night.

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