Back to Blog

Originally published on Forbes.

Digital payments have taken over our personal lives, but many businesses still rely on old-fashioned paper checks despite being slower and costlier. There are some perceived advantages to paying by check. Some businesses appreciate the reliability of the check system and find comfort in its familiarity; old habits die hard. Also, writing checks gives businesses a perceived sense of control over their cash flow. But the statistics tell a different story.  

Check usage is decreasing, with only 45% of Americans using them in 2022. Australia also plans to stop using checks by 2030, aiming to improve efficiency and regulation through digital payments. Regardless of the industry, managing finances poses challenges, but adopting digital payment solutions can streamline processes, ushering in a new era of efficiency and effectiveness in businesses’ financial management. It’s time to break free from old habits and adapt to evolving digital payment trends. 

Why saying goodbye to checks works wonders?

Faster transactions 

Digital payments speed up financial transactions, ensuring faster payment processing. Unlike the slow process of handling paper checks, businesses become more efficient with the rapid pace of digital transactions. Checks usually take 3 to 10 days, making business owners wait a long time to get paid. In contrast, digital payment options like instant payments and same-day ACH transfers only take a few seconds to a few days, making the payment process much faster.

Streamlined cash flow 

Effective cash flow management relies on predictability. Digital payments remove the uncertainty linked to check clearance times, offering businesses a smoother and more predictable cash flow. A significant 82% of small and medium-sized businesses report altering their payment methods for improved efficiency in sending or receiving payments. Digitizing accounts receivable (AR) and accounts payable (AP) processes improves cash flow management, making it easier for business owners to run their operations smoothly. 

Security first 

Modern payment solutions take security seriously, using strong measures to lower the risks of check fraud and create a safe place for financial transactions. Shockingly, reported cases of possible check fraud went up from 350,000 in 2021 to 680,000 in 2022. Paper checks can be stolen or lost, causing potential problems for financial management. 

The increase in check fraud cases shows how checks are not the safest option. They can be easily taken or misplaced, leading to financial issues for businesses. Going for digital payments is a smarter and more secure choice in today’s digital world. It not only protects businesses from the growing risk of check fraud but also makes sure their financial systems stay safe and up to date. 

Customer-friendly payments 

Digital payments bring a big advantage – flexibility in how customers pay. Saying goodbye to checks means businesses can offer various payment methods, giving customers the convenience and choices they love. For businesses looking to receive payments quickly or send bill payments ahead of time, having options like instant payments and same-day ACH transfers becomes essential. It’s all about making the payment experience smooth and flexible for both businesses and their customers. 

Real-time tracking 

Paper checks stand as a barrier to efficient financial management. Unlike digital payments, checks lack the immediacy needed for informed decision-making in business. Digital transactions offer real-time visibility, allowing businesses to track their financial well-being and strategize effectively—something checks simply can’t match. With online payments, control over fund transfers is at your fingertips, and the entire process is traceable. This transparency not only supports effective cash flow management but also eliminates the uncertainties tied to check processing times and outstanding payments. 

Effortless automatic reconciliation  

Digital payment solutions effortlessly integrate with accounting systems, automating the reconciliation process. This not only saves valuable time but guarantees precise financial records. Manual reconciliation tasks are time-consuming, causing significant delays for the AP and AR teams. The automation of this process not only saves time but also streamlines the workflow, allowing teams to focus on more strategic and impactful aspects of financial management. 

Error-free finances 

Handling paper checks is time-consuming and error-prone, involving matching payments with invoices and manual data entry. Don’t even get started on sorting out payment disputes – it’s a headache! This increases the risk of errors, impacting cash flow and customer experience. Digital payments streamline and automate these tasks, saving time and resources previously spent on manual corrections.  

Welcoming a check-free tomorrow 

The transition from checks to digital payments isn’t merely a trend; it’s a strategic move toward a future of efficient and effective financial management for small businesses. As we stand on the brink of a check-free future, small businesses have a choice to make – adopt the efficiency and advantages of digital payments or linger in the outdated practices of the past. The decline in check usage is a clear signal that the financial landscape is evolving, and those who adapt will reap the benefits of streamlined processes, improved security, and a brighter, more sustainable financial future.  

Read more

Get paid instantly 24/7/365

Sign up for Free See pricing