Why paper checks are hurting small businesses

Many small business owners cling to paper checks because they feel familiar and simple. Writing a check, dropping it in the mail, and moving on feels straightforward and, most importantly, cheap. But that sense of simplicity is an illusion. The reality? Paper checks could be quietly draining your resources, slowing your cash flow, and putting your business at serious risk.

A recent survey found that 63% of organizations faced check fraud in 2024, with small businesses often the easiest targets. Meanwhile, the costs of printing, mailing, and reconciling checks add up far beyond the price of the check itself. What seems like a cost-saving, convenient solution is actually a slow-moving, expensive, and insecure way to manage your money.

It’s time to take a closer look at why paper checks are holding your business back and what you can do instead.

The Real Problems with Paper Checks

At first glance, checks seem harmless. But behind the envelope, they create problems that quickly become costly.

‍Slowing Down Your Cash Flow 

While mailing a check might give your business a little extra float before funds leave your account, that delay comes with trade-offs. Checks take days to arrive, deposit, and clear, often stretching what could be a same-day payment into a week or more. What looks like a cash flow cushion in the short term can erode trust with your vendors and limit your financial flexibility in the long run.

‍A Security Nightmare

Paper checks put your entire bank account on display. Each check carries your business name, address, bank routing and account numbers, signature, and payment amount. Fraudsters are aware of this. Check washing, account takeovers, mail theft, and digital counterfeiting are on the rise, and small businesses are prime targets. With check fraud up reaching an all-time high in recent years, relying on paper checks is essentially leaving your door unlocked and the lights on.

‍Hidden Costs

The true cost of checks goes far beyond the $50–150 per box for printing. There’s postage, envelopes, employee time, reconciliation headaches, and the occasional lost or reissued check. A business sending 100 checks per month can easily spend over $700 — more than $8,400 annually. In contrast, ACH payments typically cost $0.25–$1.50 per transaction, saving thousands while reducing stress.

‍Reconciliation Headaches

Paper checks also wreak havoc on bookkeeping. Outstanding checks, manual entries, mismatched invoices, and stale-dated checks create an administrative frustration. The “I have to see what’s cleared” mentality actually slows cash flow visibility, making it harder to know your true financial position.

Why Small Businesses Still Stick With Checks (And Why They Shouldn’t)

If paper checks are so problematic, why do businesses keep using them? Often, it’s due to a few common misconceptions:

• Cost & Convenience: Many owners think checks are cheaper and simpler. The reality is exactly the opposite once you factor in supplies, employee time, and hidden costs.
• Tech Overwhelm: Fear of complicated software keeps businesses stuck in the past. Modern payment systems are designed for simplicity, often with support and training included.
• Control Illusion: Some believe checks give better visibility into cash flow. In truth, electronic payments provide real-time updates, automatic reconciliation, and fewer surprises.
  
  

These reasons may feel valid, but they are outdated. Staying with checks because “it’s what we’ve always done” is costing your business time, money, and peace of mind.

ACH: The Faster, Safer, Cheaper Alternative

Automated Clearing House (ACH) payments solve all the problems paper checks create, while offering benefits checks could never touch.

‍Speed: ACH transfers are nearly instantaneous compared to the week-long wait for a check to clear. Same-day processing and real-time confirmations keep cash flowing smoothly and predictably.

Security: ACH payments encrypt your financial data, require multi-factor authentication, and provide electronic audit trails. Fraud risk drops dramatically because no account numbers are physically handed to anyone.

Cost Savings: For a business making 100 payments per month, switching from checks to ACH can save you thousands annually, not including the hours saved on manual processing.

Integration: ACH works seamlessly with QuickBooks, Xero, and other accounting software, automatically recording transactions and giving you real-time insight into your cash position. 

Making the Switch

Changing payment systems can feel overwhelming—but you don’t have to do it alone. Support, training, and integration services make transitioning simple. Businesses can start small, process a few vendors electronically, and expand gradually. Real-time dashboards, mobile access, and accounting software integrations mean you see everything as it happens, giving you the confidence to leave paper checks behind.

Stop Letting Paper Checks Hold Your Business Back

Paper checks are more expensive and riskier than you realize. In a world where cash flow is crucial and fraud is rampant, continuing to rely on them is like leaving your door unlocked.

ACH payments are dramatically better than paper checks. You’ll save money, reduce risk, and free up time to focus on what really matters: growing your business.

Ready to make the switch? Contact us today to learn about our ACH solutions. Our team will guide you through setup, provide training, and support your transition so your business can start operating faster, safer, and cheaper, immediately.

‍