Opinions expressed by Entrepreneur contributors are their very own.
Key Takeaways
- Why paper checks aren’t lifeless but: Most small enterprise house owners nonetheless depend on them — what’s behind the selection?
- The stunning persistence of paper funds: Even in 2026, checks stay a go-to device for a lot of companies.
It could appear arduous to imagine, however in 2026, most small enterprise house owners nonetheless use paper checks.
The analysis reveals this. In keeping with a 2024 research from the Atlanta Federal Reserve, as a lot as 83% of small companies — these with as much as $10 million in annual revenues — use paper checks. One other research by an out of doors cost processing agency discovered related (75%) outcomes. And Mineral Tree, a world funds processing firm, stated that in simply the previous 12 months, 57% of companies paid greater than one-quarter of their distributors by way of verify.
My very own expertise corroborates this. I go to and discuss to numerous small enterprise house owners yearly. And whereas many depend on digital cost for sure distributors, most are nonetheless doing their verify runs the way in which they’ve been doing them for years — even a long time. You’d suppose that, as youthful generations take over, issues would change? Nope.
How can so many enterprise house owners nonetheless be utilizing paper checks on this modern-day? Is that this ignorance? No, only a good enterprise apply.
It’s not arduous to know. There are apparent causes to stay with paper checks. For instance, there are each the preliminary and longer-term service prices, in addition to the short-term disruption of shifting to an all-electronic cost system in comparison with the return-on-investment for not doing so. Many enterprise house owners don’t have the inner assets to implement such a undertaking. Others don’t need to rock the boat with their suppliers. After which there’s easy demographics: the vast majority of small companies are run by older enterprise house owners — these over the age of fifty — that aren’t solely set of their methods however not anxious to show issues the wrong way up to repair one thing that for them isn’t actually damaged.
However nearly as good as these causes are, there are even higher the reason why so many small enterprise house owners are sticking with paper checks.
It’s really higher safety
Though the Atlanta Fed’s research stated that utilizing paper checks comes with a extra important threat and prevalence of fraud, I’ve discovered that these dangers may be simply mitigated, and in reality are mitigated by a few of my smarter, extra financially-aware purchasers.
A very good system of inner controls ensures that each one checks are locked in a secure and solely launched from custody when a verify run is made. Even then, good monetary managers preserve a strict watch on their verify numbers.
Checks then undergo a technique of approval — manually matched to invoices after which topic to 2 signatures for disbursements over a specific amount. All of because of this by the point a verify is lastly put within the mail, it’s been in comparison with supply paperwork, reviewed, signed and verified by a number of folks in a corporation, guaranteeing there have been quite a few units of eyes laid on the transaction.
Doing so slows down the disbursement course of and offers folks time to consider a transaction earlier than the cash goes out the door. My purchasers who pay electronically oftentimes arrange their system with fewer of those processes in place, leaving them uncovered to incorrect funds.
What about fraud? That is simply defended by a preferred service that’s bought by most banks referred to as Constructive Pay. That is the place an organization submits a listing of funds (together with verify numbers, payee, quantity and date) to the financial institution upfront, and the financial institution solely disburses cash when the verify introduced matches that record. Most bankers I do know inform me this service works simply as nicely — if not higher — with guide checks introduced vs. digital funds submitted that may be topic to potential malware or hackers.
And talking of malware and hackers, firms which might be totally reliant on digital funds proceed to be uncovered to information breaches and hacks. Digital cost methods (ACH, wires, on-line banking) are main targets for fraud, and plenty of assaults bypass the financial institution solely by exploiting folks and processes. A 2025 funds fraud research from the Affiliation of Monetary Professionals Funds Fraud reported that 79% of organizations skilled precise or tried funds fraud in 2024. A current FBI report discovered that digital funds are central to losses for each enterprise house owners and banks, with cyber-enabled fraud accounting for 83% of all reported monetary losses and wire and ACH funds being key channels in profitable fraud instances.
The place paper checks actually win
All of those are good the reason why an organization could need to persist with a guide verify processing course of. However it’s not the principle cause why I see this so usually in my purchasers. That cause is easy: higher money administration. Or ought to I say higher float administration?
That’s as a result of if you submit a cost to a financial institution, your cash is instantly gone out of your account, even when it nonetheless takes a number of days for it to reach on the provider. The financial institution is making its cash, however firms miss out on these additional days of curiosity, which, relying on how a lot money you have got, may very well be important.
There’s additionally the management issue. Various enterprise house owners I do know like to chop checks and put them in a drawer. The cash is out of their account so far as their books are involved. However it hasn’t left the financial institution but, which may very well be essential for firms dealing with money stream challenges or in the event that they’re in the course of a dispute. As soon as a verify is put within the mail, there are nonetheless a number of enterprise days earlier than it reaches the provider after which will get cashed. All of those additional days give the enterprise proprietor the power to increase their money stream just a bit bit, with out incurring curiosity prices or having to lean on different sources of financing.
All of those causes clarify why so many enterprise house owners are nonetheless doing their verify runs the old-school method: utilizing paper. It could go towards frequent conference. However they’re not improper.
Key Takeaways
- Why paper checks aren’t lifeless but: Most small enterprise house owners nonetheless depend on them — what’s behind the selection?
- The stunning persistence of paper funds: Even in 2026, checks stay a go-to device for a lot of companies.
It could appear arduous to imagine, however in 2026, most small enterprise house owners nonetheless use paper checks.
The analysis reveals this. In keeping with a 2024 research from the Atlanta Federal Reserve, as a lot as 83% of small companies — these with as much as $10 million in annual revenues — use paper checks. One other research by an out of doors cost processing agency discovered related (75%) outcomes. And Mineral Tree, a world funds processing firm, stated that in simply the previous 12 months, 57% of companies paid greater than one-quarter of their distributors by way of verify.
My very own expertise corroborates this. I go to and discuss to numerous small enterprise house owners yearly. And whereas many depend on digital cost for sure distributors, most are nonetheless doing their verify runs the way in which they’ve been doing them for years — even a long time. You’d suppose that, as youthful generations take over, issues would change? Nope.
