Are there any caveats I should be aware of in exchanging cheques payable to my company for cash. A lot of our trade customers - mainly very low end sole traders - operate entirely in cash, so when their customers want to write a cheque they use our company name. Most of the time they remit these as part payment for our services, but occassionally they may ask "can you cash this for me". This works for me as it saves the bank charges on depositing cash, and from an accounting perspective it is just depositing cash, but in a "worst case scenario" environment, does the cheque need to be attached to an invoice and hence have a VAT concern?
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I'd say your upside is saved bank charges.

Your downsides are (a) the cheque may bounce, (b) you may be facilitating the sole trader's money laundering, and (c) an audit of the accounting records of the sole trader's customers might lead to HMRC believing that you ahve raised an invoice but not accounted for it.

The upside looks a little sparse in comparison!
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I think the upside is more about customer goodwill than the bank charges. I certainly wouldnt try to do it just to save the charges. It is always hard to refuse when a customer asks you to do something, unless you can give them a clear reason why (which they will understand - which is also tricky)

The amounts are not massive, and the ultimate customers are nearly always private individuals, but it is good to know what may or may not happen.
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