Small Business

Why 100% Of Small Businesses Still Use Checks

In a world where just about anything can be paid electronically, it’s hard to believe that roughly 100% of businesses still use paper checks. In a recent Viewpost survey of nearly 3,000 U.S. based businesses, executives reported that, on average, 37 percent of payments were still being made by paper checks. Surprisingly, this number surpasses electronic payments which came in at 35 percent. With numerous methods of making payments that are more cost effective and time efficient, one has to ask, “why are businesses still using paper checks?”¬†

1) Suppliers Don’t Accept Electronic Payments

In the Viewpost survey, 41 percent of respondents admitted that the number one reason they still use checks is because their suppliers don’t accept electronic payment. Because of the low margins in the B2B (business to business) environment, companies are cutting unnecessary cost like credit card processing fees. Suppliers would rather wait for a check to come in the mail then pay thousands of dollars annually in transaction cost.

2) Paper Trail

Another reason why businesses hold on to their checkbook is because of the paper trail. Paper checks often contain more information than electronic payments, which allows companies to match payments with goods received. A paper trail can be created by attaching a check to the invoice, whereas invoice details are not always included via wire transfers or automated clearing house (ACH) transactions.

Vendors also prefer checks because they can easily match invoices with goods sold. Checks often contain the name of the buyer and can be matched to the corresponding invoice quite easily.

3) Payroll

Accounting for 2.7 billion checks annually, payroll has kept paper checks relevant in an era where direct deposit has become standard. Small businesses who pay employees with checks often do so because it has been the norm for years. Many small businesses think that services like direct deposit are expensive and requires third party assistance. However, using direct deposit and automated payroll services can save both time and money.

4) Ease of Use

One of the main reasons paper checks are so dominant is because they are easy to use. For those who have been using checks for years there is no incentive to make a change. If you wanted to send a payment to a vendor you can simply pull out your checkbook, write a check and drop it in the mail.

Electronic payment methods can be easier in the long run but require more setup. Companies like are beginning to partner with companies like Intuit to make it much easier to pay vendors. Simply open your Quickbooks, examine your AP and make a payment directly.


Although the use of paper checks is on the decline, there are still many barriers to electronic payments. New technology will soon make it easier to make B2B transfers and significantly reduce processing fees, however, this technology is still not widely used. It will take several years, if not decades, to eliminate the need for paper checks, but advancements in electronic payment processing seems promising.



Jeremias Ramos is a CPA working at a nationally recognized full-service accounting, tax, and consulting firm with offices conveniently located throughout the Northeast. Jeremias specializes in tax and business consulting with focus areas in real estate, professional service providers, medical practitioners, and eCommerce businesses.

1 comment on “Why 100% Of Small Businesses Still Use Checks

  1. Pingback: Homepage

Leave a Reply

%d bloggers like this: