IIn these days of electronic everything, you’d think most businesses wouldn’t use paper checks anymore. Consumers have certainly ditched the paper check. According to a study, only 7% of their bills are paid this way. Many of my clients have not received this memo.
For most businesses, paper checks are still a thing. As many as one in three business-to-business transactions are paid this way, and 81% of firms in the US still use paper checks to settle at least some of their bills.
Stop rolling your eyes because yes, we know. Electronic payments make more sense for a business. They are faster to initiate, authorize and complete, and they are easier to track, audit and report. They save paper and are good for the environment. They are safer, more efficient and cost less. They can be initiated and approved from anywhere. And a growing number of businesses not only prefer electronic payment, but require their customers to do so. My company sells Microsoft products and even Microsoft recently announced that it will no longer accept paper checks from its partners. So the writing is on the wall.
But still…I will miss the paper check.
I’ve always liked the pomp and circumstance of the bi-weekly check-up. Retrieves the stack of blank checks from the locked safe in the accountant’s office. Tearing off the exact number of checks needed and running them through the dot matrix printer for duplicate copies. Logging of amount, payee, date and check number in accounting ledger. And then the grandest of all gestures: the final approval evidenced by the ultimate proof of authority: the signature. Some of my clients enjoyed the ability to scrutinize and sign each check because there is no better example of power than this.
Of course, the process becomes even more serious when a manual check is required, because it requires you to pull out the “special” checkbook that usually resides in a locked desk drawer. Instead of using a computer, the accountant or business owner must type out all the information required while peering carefully over glasses at the nervous recipient. This is followed by licking, ripping, folding and the ceremonial handover that always involves “don’t make me regret this”.
And who doesn’t love saying “the check is in the mail” while enjoying the five to seven day float before the money is actually removed from the account? All this is lost in the world of electronic transactions. Now only the banks benefit from the profit. There is no glitz and glamor with online transactions. We are digitizing the emotional experience of this venerable business transaction, one EFT at a time.
Paper checks are not only a written form of contract embraced by companies throughout history, but also a form of marketing where companies can proudly display their logos. They are concrete evidence of stability and reliability. Most importantly, the bi-weekly check run is a time for reflection, a sort of ceremony where those suppliers deemed worthy of payment are singled out, approved and honored with a place in the stack on our desk for the final sign-off.
Paper checks are real. They provide the necessary backup for auditors. They are tangible, with a lot of information crammed on them. There are addresses and the signature (or two signatures if it’s really special!). It is the amount that is so important that it is not only shown in dollars and cents, but also written—as “one hundred and forty-one dollars and fifty-seven cents”—to add gravitas to the event about to happen: payment for products.
And there are numbers, lots of numbers: the check number, the date and the bank routing and account number stamped on the bottom in the same font that looks suspiciously like the title sequence from 2001: A Space Odyssey as if it was once a wish to show how futuristic this is. On the back of the check are stamps such as “for deposit only” (as if it were to be used for another purpose) along with imprints of the banks involved and a signature of the depositor to “endorse” the cheque.
Of course, any accountant can tell you that these measures are for display only. Counterfeit stamps can be easily made. Signatures can be forged. Amounts can be transformed with a similar colored pen or a bottle of Wite-Out. But it feels official, so why not? And who doesn’t love receiving checks? Checks are pretty much the only reason we look at our mail. They make the trip to the post office something akin to opening presents on Christmas Day.
Unfortunately, all of this is disappearing. And that makes me sad.
According to the Small Business Administration, the majority of small business owners are over the age of 50. We grew up with Swanson TV dinners, hockey without helmets and designated smoking sections on airplanes. We know that this will inevitably change. We will retire and younger generations will bury us with our checkbooks. But for now, many companies in the US are still clinging to the old ways of paying their suppliers.
Yes, it is inefficient and more expensive. But be patient. Allow us this one little pleasure while it lasts.