Individuals have long moved away from paper checks thanks to the convenience of digital banking services such as payment wallets and net banking. For average consumers even swiping plastic bank cards seem old school as more and more customers are seen using services such as Apple Pay at checkout counters. When it comes to B2C transactions the paper check is all but obsolete. Then why do businesses still use checks to pay other businesses? Believe it or not, paper checks are more convenient for businesses. Most business enterprises make hundreds of payments each month and for them, point-to-point systems designed for individuals simply don’t make sense. It’s much easier for them to print checks in bulk and mail them to their vendors and utility companies. If you are wondering why businesses still have their checkbooks around, following are 3 reasons.
It’s More Convenient Than Cash and Credit Card:
While credit cards are great for average customers, they don’t do much for business enterprises. Businesses that need to pay other businesses don’t really get the option to swipe their cards. For using credit cards business owners and executives need to physically swipe them on credit card terminals to complete the transaction. The same goes for cash payments. To be able to make payments, business owners need to physically hand out cash bills. This forces them to go to the bank or ATM to withdraw the money and then deliver them in person. Paper checks, on the other hand, are issued by authorized accountants and executives. Unlike cash or credit card, paper checks can be delivered by others without the risk of misuse. They are not only printed in bulk to save time but they are also sent via mail. It takes mere minutes to print a check, seal it inside a window envelope, and get it ready for the mail guy.
Paying Contractors Who Have No Bank Accounts:
A lot of small businesses need to make payments to contractors who don’t have bank accounts. Before checks came along these transactions were done in cash. The reason cash became obsolete is that paper checks allow business owners to maintain a paper trail. Even when making quick payments to people who have accounts, paper checks are the way to go. It’s much easier to whip out the checkbook and write a check than to register the banking details and send out the money using payment wallets and net banking services.
Compatibility with Accounting Software Packages:
One of the major operational challenges of every business is to track expenses. Most businesses buy high-quality quick books check and print them using the Quickbooks accounting software. This does two things. Firstly, the printing operation is much faster as the accounting software stores the digital copy of the signature and recipient details. The software also stores the invoices received from vendors. Accountants can seamlessly print checks to clear received invoices while keeping a record of the payments made. Now, because most accounting software packages for businesses are compatible with paper checks and not with online transfers and other payment methods, businesses using them have no option but to use business checks to pay for goods and services.