The true cost of checks
What does it cost your company to pay with a check? There’s the cost of the check — and perhaps it isn’t all that much. So why should you care about eliminating such a small expense to your company? In reality, checks cost your company a great deal more in both time and money. Let’s look at what paying with checks really costs you.
What your checks cost
Digging deeper uncovers several factors to be calculated into the true cost of checks. Your mind may automatically go to mailing costs (envelopes, paper, and stamps) or bank fees (check reconciliation fees, stop payment request fees, etc.) but the largest cost to making your business payments with checks is manpower. Think of the time your team commits to preparing, sending, and following up on those checks. So what does all that time cost?
“Bank of America estimates that a business check can cost an aggregate of $4 to $20, based on the price of the check and shipping, plus the time employees spend writing, mailing, collecting and reconciling the check.” (via WSJ.com) Multiply that per-check cost by the number of payments you make each year and you’re starting to see some pretty large numbers. A recent analysis of businesses processing 500 checks per month with three employees reviewing the payments calculated the cost of checks at $24,540 annually (via Bill.com).
What you can do about it
Digital payments solve your costly check problem. CPA Practice Advisor explains it this way: going digital, “saves firms the hard costs associated with processing paper payments … as well as soft costs, including the time it takes employees to manually enter data and manage approval workflows.” Handling your business’ payments (including agent commissions, vendor payments, and more) digitally will free up your team to focus on value-add tasks, “like strengthening supplier relationships and identifying new opportunities.” (via CPA Practice Advisor)
If you’re looking for a way to grow your business without having to grow your team then digital payments are the solution to add hours back in your work day. Earnnest lets you collect or pay almost any type of payment digitally. From earnest money deposits and vendor payments, to agent fee collection and commission disbursement Earnnest makes it easy to save time and money on your payments.
Stop accepting the cost of checks and start maximizing your team with Earnnest’s digital payment solutions.