For many business owners, paper checks feel familiar, straightforward, and tangible. But in today’s business environment, this method creates hidden risks, inefficiencies, and expenses that you didn’t see coming.
As bookkeeping systems, banks, and vendor processes have evolved, checks haven’t kept pace. What once felt simple is now one of the most cumbersome, expensive, and fraud-prone ways to move money.
Here’s what every business owner should know before reaching for the checkbook.
1. Checks Are One of the Highest-Risk Payment Methods for Fraud
Few business owners realize just how vulnerable checks are. Every paper check displays your bank account number, routing number, business name, and often your physical address and signature—everything a criminal needs to attempt unauthorized withdrawals.
Mail-based check fraud is a rapidly growing issue nationwide. Thieves steal envelopes from mailboxes, “wash” the check to alter the payee and amount, and cash it before anyone notices.
The consequences can be severe:
- Your money is gone
- Duplicate fraudulent checks
- Bank account holds or shutdowns during investigation
- Business operations disrupted for weeks with NSF transactions
Digital payments don’t expose your banking credentials and include encryption, authentication, and built-in fraud monitoring. Checks just can’t compete on security.
2. Checks Slow Down Cash Flow—and Create Uncertainty
Unlike electronic payments, which appear instantly or within a business day, checks often take 5–15 days or more to fully process. That delay includes:
- Mailing time
- Vendor processing time
- Bank clearing time
This means your true cash position is often unclear. A vendor may hold a check for weeks—or even months—before depositing it. During that time, the money looks available in your online banking even though it’s already committed.
This creates real problems:
- Inaccurate account balances in your banking app
- Unexpected overdrafts when a forgotten check finally clears
- Difficulty forecasting cash flow
- Time-consuming tracking of outstanding checks
Business owners today expect real-time financial clarity. Checks make that much more complicated.
3. Checks Increase Accounting and Bookkeeping Costs
Checks create more work for your accountant, which often translates into higher fees. Unlike digital transactions that sync smoothly into bank feeds, checks require more:
- Manual data entry
- Interpretation of poorly scanned check images
- Follow-up questions (“Who was check #1874 for?”)
- Tracking and reconciliation of outstanding checks
- Re-issuing lost or stale-dated checks
Physical check stubs also create paper trails that must be filed, stored, and in many cases scanned, adding time and clutter. Even well-organized businesses end up spending far more administrative labor on checks than on any electronic payment method.
4. The Real Cost of Checks Is Higher Than You Think
Checks feel inexpensive, but when you add everything up, each check typically costs $4–$20 to produce and manage. Costs include:
- Check stock and specialized printing
- Envelopes and postage
- Printer ink and security features
- Staff time to write, sign, stuff, stamp, and mail
- Time spent correcting errors, tracking lost checks, or reissuing them
In contrast, ACH payments generally cost pennies and require no physical materials or labor. ACH payments can generally be set up once and scheduled as a monthly payment. That time savings adds up.
5. Lost, Delayed, or Returned Checks Create Extra Work
Checks get lost more often than business owners expect, both in the mail and within organizations. Common issues include:
Lost or damaged in transit
Mail delays, theft, or damage can cause checks to never arrive. When a check is torn or rained on, the odds go down, that it will process correctly.
Sent to an outdated or incorrect address
A simple typo can trigger:
- Vendor frustration
- Late fees
- Duplicate work to reissue a check
Returned due to mistakes
A check may be rejected for:
- Incorrect payee name
- Signature mismatch
- Amount mismatch between numbers and words
- Bank processing errors
Every one of these issues creates additional time, cost, and bookkeeping work. Electronic payments eliminate virtually all of these risks.
6. Vendors Now Prefer ACH or Digital Payments
More vendors are moving away from checks because they slow down their operations. Many now incentivize digital payments by offering:
- Prompt-pay discounts
- Reduced processing fees
- Faster shipping or priority scheduling
ACH payments cost vendors less, clear faster, and provide a predictable payment timeline.
7. Checks Are Harder to Automate and Don’t Integrate With Modern Systems
Today’s accounting tools are built around automation, efficiency, and digital workflows. Checks, however, disrupt all of that.
With checks, your team must:
- Manually prepare each check
- Coordinate signatures from authorized personnel
- Track physical paperwork
- Reconcile cleared checks one by one
- Store or scan paper documents
This raises the chance of error and caps your ability to scale. Digital payments, on the other hand:
- Sync directly with accounting software
- Create automatic, searchable audit trails
- Enable simple approval workflows
- Support recurring or batch payments
Automation saves time, strengthens internal controls, and reduces the likelihood of costly mistakes.
8. Disputes are hard to win
When something goes wrong with a check, good luck with the bank:
- Most banks won’t even consider paying unless you discover the fraud very quickly
- Banks may or may not reimburse you when they clear a fraudulent check
- Fraud disputes require physical evidence
- Banks will question your policies around check security
Digital payments include built-in protections and quicker dispute processes, providing clearer documentation and faster resolutions.
9. Checks Create Paper Dependence and Extra Storage Requirements
Using checks means maintaining physical stubs, envelopes, stacks of copies, scanned files, and secure storage. Even if documents are scanned, it’s still an extra step, one that digital payments eliminate entirely.
Going digital reduces:
- Physical clutter
- Filing and storage needs
- Risk of missing or damaged paper records
- Time spent organizing documents
It also supports remote access, better team collaboration, and cleaner audit trails.
The Bottom Line: Check Writing Is Holding Your Business Back
Checks may feel traditional, familiar, and simple, but they come with too many risks, slowdowns, and administrative burdens that drain time and money from your business.
Modern digital payment systems offer:
- Stronger fraud protection
- Real-time cash flow clarity
- Lower transaction costs
- Automatic bookkeeping integration
- Faster vendor payments
- Fewer errors and delays
- A more professional, modern image
Moving away from checks isn’t just a technological upgrade, it’s a strategic move that gives your business more control, more visibility, and more peace of mind.