In these days of electronic-everything, you’d think that most businesses wouldn’t be using paper checks any more. Consumers have certainly ditched the paper check. According to one study, only 7% of their bills are paid this way. Many of my clients haven’t 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 are still using paper checks to settle at least some of their bills.
Stop the eye-rolling because yeah, we know. Electronic payments make more sense for a business. They’re quicker to initiate, authorize and complete, and they’re easier to track, audit and report. They save paper and are good for the environment. They’re more secure, efficient and cost less. They can be initiated and approved from anywhere. And a growing number of businesses not only prefer payment electronically, but are requiring customers to do this. My company sells Microsoft products and even Microsoft recently announced that it will no longer accept paper checks from its partners. So the writing’s on the wall.
But still … I’m going to miss the paper check.
I’ve always enjoyed the pomp and circumstance of the biweekly check run. Getting the stack of blank checks from the locked safe in the accountant’s office. Tearing off the exact number of checks needed and feeding them through the dot matrix printer for duplicate copies. Logging the amount, payee, date and check number in the 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 relished the opportunity to scrutinize and sign every check because there’s no better example of power than this.
Of course, the process becomes even more serious when a manual check is required because that requires the pulling out of the of the “special” checkbook which is usually in a locked desk drawer. Rather than use a computer, the accountant or business owner has to write out all the information required while warily peering over spectacles at the nervous recipient. This is followed by the licking, ripping, folding and the ceremonial handover which always implies “don’t make me regret this”.
And who doesn’t love saying “the check’s in the mail” while enjoying the five to seven-day float before money is actually removed from the account? All of this is lost in the online transaction world. Only the banks now enjoy the profit of the float. There’s no pomp and circumstance with online transactions. We’re digitizing the emotional experience of this time-honored business transaction, one EFT at a time.
Paper checks are not only a written form of contract embraced by firms throughout history but also a form of marketing where companies can proudly display their logos. They are tangible evidence of stability and reliability. Most importantly, the biweekly check run is a time of reflection, a ceremony of sorts where those vendors 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 needed backup for auditors. They are tangible, with lots of information crammed on them. There are addresses and the signature (or two signatures if it’s really special!). There is the amount which is so important that it’s not only shown in dollars and cents but also written – like “one hundred forty-one dollars and fifty-seven cents” – to add to the gravitas of the event which is about to occur: the 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 using the same font which suspiciously looks like the title sequence of 2001: A Space Odyssey as if there was once a desire to show just how futuristic this is. On the back of the check are stamps like “for deposit only” (as if it was going to be used for some other purpose) along with imprints from the banks involved and a signature of the depositor to “endorse” the check.
Of course, any accountant could tell you that these measures are for show only. Fake stamps can easily be created. Signatures can be forged. Amounts can be transformed with a similar color 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 up presents on Christmas Day.
Unfortunately, all of this is going away. 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 in airplanes. We know this will inevitably change. We’ll retire and younger generations will bury us along with our checkbooks. But for now, many businesses in the US are still clinging to the old-school ways of paying their vendors.
Yes, it’s inefficient and costlier. But please be patient. Allow us this one little enjoyment while it lasts.
