Pros & Cons of Using Paper Checks

July 29, 2021

Pros & Cons of Using Paper Checks

While some sources predict the death of paper checks as early as 2026, the reality is this tried and true payment method remains essential to many businesses, both large and small. Paper checks continue to have staying power even in the day of digital transactions because they continue to offer a way to pay that can be cost-effective and convenient under the right circumstances. If you are wondering if your small business could benefit from continuing to cut checks to pay vendors, contractors, and other expenses, then keep reading to learn more about the pros and cons of using paper checks.

What Are Paper Checks?

A paper check allows one party to pay another by drawing money directly from the payer's account. Checks include all the necessary information to make the transaction, including the payer's bank account and routing numbers. The payer will also write in the payee's name, the date, and the desired amount on the check. Lastly, the check must be signed on the signature line. 

Do Businesses Still Need Paper Checks?

While the use of paper checks has steadily declined over the years, many consumers and businesses continue to use them. Nearly 50% of businesses still use paper checks for business-to-business transactions. Companies use paper checks for many reasons, including familiarity and cost savings compared with digital transactions.

Ways Small Businesses Use Paper Checks

While paying with cash, Venmo, or Apple Pay works fine among friends and family, businesses simply can't rely on these solutions to keep the lights on. Instead, they often turn to checks to help track their expenses and reliably make larger payments. Reasons a small business may still choose to use paper checks include:

  • Paying another business
  • Paying a contractor or service provider
  • Paying employees
  • Receiving payments from customers 

Pros & Cons of Using Paper Checks

While no single payment type is perfect, paper checks certainly offer some distinct advantages and disadvantages for a business. Below, we'll explore these pros and cons to help you decide if paper checks are right for your business.

Pros of Paper Checks

While it may be easy to dismiss the need for paper checks on the surface, their potential value to your business may surprise you once you look a little deeper.

Get Additional Time to Secure Funds

While frictionless online payments can be almost instant, paper checks provide more cushion for the payer. The time from signing a check to the money being transferred from your account could take days, during which time you could have the opportunity to deposit additional funds or even cancel the check if a mistake was made.

Pay in Advance With Postdate

Using the postdate on a paper check allows you to specify when the check should be cashed. Writing in a future postdate enables your business to prepare necessary payments ahead of time and helps ensure your account will have the needed funds when the time comes to pay.

Easy to Transport & Keep On Hand

If your business operates on the move, checks can provide a safe and convenient way to travel. Compared to cash, carrying around a check makes theft far less likely. Checks also need no internet connection if you are working in remote locations.

Fewer Transaction Fees

While there are some costs associated with writing checks, they may still be less expensive for a business to use compared to credit cards or other online payment processing fees.

Increased Security

Lose your cash or credit card on the street, and thieves can quickly drain your accounts with little accountability or recourse. However, paper checks are difficult to cash as the bank will require a proper signature and identification before allowing any money to change hands.

Provides Built-in Proof of Payment

Businesses need to track how, when, and to whom payments are made. Paper checks have a built-in way of tracking your payments over time, giving your business a simple way to track and look back on past payments.

Cons of Paper Checks

Even with their advantages, paper checks continue to fall out of favor for more modern payment methods. So before you write your next check, be sure to consider the cons of using paper checks.

Not Preferred by Younger Generations

If your business works with a lot of younger business owners and contractors, then paper checks may not be the best way of doing business. While not a universal rule, millennials and Gen Z tend to prefer digital payments. 

Possible Additional Costs

While checks may be cheaper than other options, there are still costs associated with using paper checks. From the cost of the checks themselves to the hours spent by your accounting team to write, print, and keep track of them, writing a check could cost you between $4 and $20 by some estimates.

Longer Processing Times

Checks may be reliable, but they are not fast. Paper checks typically take two business days to process, making them one of the slower payment methods.

Can Get Lost in the Mail

Unlike secure online payments that can go between parties in seconds, checks that are not cut in person are usually mailed. This can cause further delay and introduces more possibilities of the check being lost, stolen, or otherwise damaged along the way.

Time-Consuming to Write & Print

Like the processing times, paper checks can also be time-consuming for the business itself. Writing, printing, and mailing checks is not an easy endeavor, and without the right help, it could take time away from other important work.

Paper Checks Made Simple

At Zoom Checks, we understand the importance of checks for doing business. However, we recognized that writing checks could present some unique challenges. To help, we created a simpler way to use checks. 

Perfect for small business owners and entrepreneurs, Zoom Checks allows for unlimited check creation and printing for one low monthly cost — no special software, paper, or printer needed. 

Getting started is easy! Click here to create an account and enjoy a 14-day free trial without sharing any credit card information.