All across the country, paper checks are on the decline. Back in 2000, Americans wrote roughly 37.3 billion paper checks. Ten years later, the number fell by more than 50 percent to 18.3 billion.
According to some estimates, businesses lose anywhere from $4 to $20 to cut, mail, and process each paper check within its network. Surprisingly, though, most businesses still pay 50 percent of their bills using paper checks. And 48 percent of small businesses don’t use direct deposit payroll at all. Some experts predict that paper checks won’t die out until 2026.
Given the advantages of electronic bill payment, why are paper checks still so commonplace? One answer? Inertia.
Why Are Paper Checks Still So Popular?
There are a few reasons to explain why many American businesses still cling to paper-based payment systems, including:
They already know that paper checks work. There is nothing to change or learn. It’s business as usual.
Pretty much every business that accepts e-payments also accepts paper checks. Unfortunately, the reverse isn’t always true. Although your company might accept both, there’s no guarantee that all of your upstream and downstream suppliers offer paperless invoicing.
3. Cash Flow
Some businesses like the delay that comes with paper check processing. These delays offer a few extra days of liquidity, allowing cash-strapped businesses to remain afloat a little bit longer.
4. “Perceived” Budget
For some businesses, e-payment options sound too good to be true. They don’t believe they’re large or established enough to qualify for a payment system that offers such unparalleled convenience.
This is a bit silly when you realize e-payments and direct deposit are money-savers (and profit-boosters), regardless of company size.
Does Your Company Still Use Paper Checks?
Paper checks are a drain on valuable resources. And by switching to e-payments, your company will be able to:
Save money (as much as $20 per check)
Save time (allowing your employees to focus on activities that actually add value)
Save the planet (reducing your carbon footprint is an important component of corporate social responsibility)
But if you’re hesitant about abandoning paper checks for the reasons outlined above, you might consider introducing e-payments slowly over time. Start small, measure the results, and decide whether it makes sense to keep phasing out paper checks.
To help you get started, use the free resources below: