Why This Previous-Faculty Cost Technique Nonetheless Dominates Small Enterprise

It might appear arduous to consider, however in 2026, most small enterprise homeowners nonetheless use paper checks. 

The analysis exhibits this. In response to a 2024 examine from the Atlanta Federal Reserve, as a lot as 83% of small companies — these with as much as $10 million in annual revenues — use paper checks. One other examine by an outdoor cost processing agency discovered comparable (75%) outcomes. And Mineral Tree, a worldwide funds processing firm, mentioned that in simply the previous 12 months, 57% of companies paid greater than one-quarter of their distributors by way of test. 

My very own expertise corroborates this. I go to and speak to numerous small enterprise homeowners yearly. And whereas many depend on digital cost for sure distributors, most are nonetheless doing their test runs the best way they’ve been doing them for years — even many years.  You’ll assume that, as youthful generations take over, issues would change? Nope.

How can so many enterprise homeowners nonetheless be utilizing paper checks on this modern-day?  Is that this ignorance? No, only a good enterprise observe.

It’s not arduous to grasp. There are apparent causes to stay with paper checks. For instance, there are each the preliminary and longer-term service prices, in addition to the short-term disruption of transferring to an all-electronic cost system in comparison with the return-on-investment for not doing so. Many enterprise homeowners don’t have the interior assets to implement such a undertaking. Others don’t need to rock the boat with their suppliers. After which there’s easy demographics: nearly all of small companies are run by older enterprise homeowners — these over the age of fifty — that aren’t solely set of their methods however not anxious to show issues the wrong way up to repair one thing that for them isn’t actually damaged.

However pretty much as good as these causes are, there are even higher the explanation why so many small enterprise homeowners are sticking with paper checks.

It’s really higher safety

Though the Atlanta Fed’s examine mentioned that utilizing paper checks comes with a extra vital threat and prevalence of fraud, I’ve discovered that these dangers could be simply mitigated, and in reality are mitigated by a few of my smarter, extra financially-aware shoppers.

A superb system of inner controls ensures that each one checks are locked in a protected and solely launched from custody when a test run is made. Even then, good monetary managers preserve a strict watch on their test numbers.

Checks then undergo a strategy of approval — manually matched to invoices after which topic to 2 signatures for disbursements over a certain quantity. All of because of this by the point a test is lastly put within the mail, it’s been in comparison with supply paperwork, reviewed, signed and verified by a number of individuals in a company, making certain there have been quite a few units of eyes laid on the transaction. 

Doing so slows down the disbursement course of and provides individuals time to consider a transaction earlier than the cash goes out the door. My shoppers who pay electronically oftentimes arrange their system with fewer of those processes in place, leaving them uncovered to incorrect funds.

What about fraud? That is simply defended by a well-liked service that’s offered by most banks known as Optimistic Pay. That is the place an organization submits an inventory of funds (together with test numbers, payee, quantity and date) to the financial institution upfront, and the financial institution solely disburses cash when the test introduced matches that checklist. Most bankers I do know inform me this service works simply as nicely — if not higher — with handbook checks introduced vs. digital funds submitted that may be topic to potential malware or hackers.

And talking of malware and hackers, firms which are absolutely reliant on digital funds proceed to be uncovered to knowledge breaches and hacks. Digital cost techniques (ACH, wires, on-line banking) are main targets for fraud, and lots of assaults bypass the financial institution completely by exploiting individuals and processes. A 2025 funds fraud examine from the Affiliation of Monetary Professionals Funds Fraud reported that 79% of organizations skilled precise or tried funds fraud in 2024. A latest FBI report discovered that digital funds are central to losses for each enterprise homeowners and banks, with cyber-enabled fraud accounting for 83% of all reported monetary losses and wire and ACH funds being key channels in profitable fraud instances.

The place paper checks actually win

All of those are good the explanation why an organization could need to persist with a handbook test processing course of. However it’s not the primary purpose why I see this so typically in my shoppers. That purpose is easy: higher money administration. Or ought to I say higher float administration?

That’s as a result of whenever you submit a cost to a financial institution, your cash is straight away gone out of your account, even when it nonetheless takes just a few days for it to reach on the provider. The financial institution is making its cash, however firms miss out on these further days of curiosity, which, relying on how a lot money you’ve got, could possibly be vital.

There’s additionally the management issue.  Quite a lot of enterprise homeowners I do know like to chop checks and put them in a drawer. The cash is out of their account so far as their books are involved. However it hasn’t left the financial institution but, which could possibly be crucial for firms going through money movement challenges or in the event that they’re in the midst of a dispute. As soon as a test is put within the mail, there are nonetheless just a few enterprise days earlier than it reaches the provider after which will get cashed. All of those further days give the enterprise proprietor the power to increase their money movement just a bit bit, with out incurring curiosity prices or having to lean on different sources of financing.

All of those causes clarify why so many enterprise homeowners are nonetheless doing their test runs the old-school method: utilizing paper. It might go in opposition to widespread conference. However they’re not incorrect.

It might appear arduous to consider, however in 2026, most small enterprise homeowners nonetheless use paper checks. 

The analysis exhibits this. In response to a 2024 examine from the Atlanta Federal Reserve, as a lot as 83% of small companies — these with as much as $10 million in annual revenues — use paper checks. One other examine by an outdoor cost processing agency discovered comparable (75%) outcomes. And Mineral Tree, a worldwide funds processing firm, mentioned that in simply the previous 12 months, 57% of companies paid greater than one-quarter of their distributors by way of test. 

My very own expertise corroborates this. I go to and speak to numerous small enterprise homeowners yearly. And whereas many depend on digital cost for sure distributors, most are nonetheless doing their test runs the best way they’ve been doing them for years — even many years.  You’ll assume that, as youthful generations take over, issues would change? Nope.