Estimates suggest your business could be spending $24,540 annually just processing paper checks.
Since 1865, checks have played a pivotal role in the United States payment system. Checks were the only non-cash option for the first 100 years of its existence, until credit cards were introduced in the 1950s. As payment technology has evolved, the need for checks has diminished — but the costs have remained. Here are three ways paper checks could be costing your business more than you realize:
A cheaper and environmentally friendly option is ACH processing, which can cost as little as $0.25 per check to process. In contrast to Bill.com's $24,540 estimate for paper checks, ACH checks cost just $1,680 annually — a 93 percent reduction in costs. Though the growth of ACH was initially slow, 19 billion ACH transactions are now processed annually. Why? Because beyond its low cost and green technology, it’s convenient.
For one, processing ACH payments through Virtual Terminals allows for faster deposit verification. Most providers that do ACH check processing offer next-day funding, which means you’ll get your money deposited into your account within a day. That’s much quicker than the typical seven to 10 days it takes for paper checks to clear.
ACH processing sends quicker alerts of rejects or NOCs, so there’s less time between the initial payment and notifications of delays. You also gain the ability to collect hands-off recurring payments. Instead of collecting mailed-in checks, you can set up a custom schedule to automatically bill your customers’ accounts. With the ability to store accounts on file, you can also re-charge your customers for one-time transactions.
Instead of using duplicate checks to create a paper trail of transactions, ACH payments allow you to produce a receipt that is stored in the cloud for quick reference. The receipt can be emailed to the customer for her records, and a signature can be captured in-person or remotely to ensure that the transaction has been authorized.
Instead of using duplicate checks to create a paper trail of the transactions, ACH payments allow you to produce a receipt that is stored in the cloud for quick reference. The receipt can be emailed to the customer for their records, and a signature can be captured in-person or remotely to ensure that the transaction has been authorized.
Opt for ACH check processing to not only save your business time and resources, while reducing your environmental footprint!
Editor's Note: This post was originally published in August 2017 and has been updated for comprehensiveness and accuracy.