Woman with paper check

Why Are Paper Checks Still So Popular?

While there’s plenty of momentum toward automating accounts payable (AP) processes, the reality is that a large number of businesses are stilling paying with paper checks.

During the recent REVx on the Road event with finance leaders from the Denver area, this became abundantly clear. A few stop-in-your-tracks stats from a Goldman Sachs research report were shared with the panel of finance pros.

These stats struck home big-time:

  • 60 percent of all business-to-business payments are still made by check.
  • The payments by check percentages jump to 80 percent for small and medium businesses.

With so much of the world eliminating the use of paper in business practices, why are these numbers so high?

According to the experts, it’s simple: Everybody likes a check. It makes them comfortable. They’re used to them. Plus, accounting and enterprise resource planning (ERP) systems print checks really well.

The biggest users of checks are small businesses because they think they have less time to adopt automated AP processes that would allow them to use fewer checks.

CFOs care about how AP automation adds business value

This “checks are still popular” insight isn’t the only realistic situation causing some resistance towards more widespread deployment of AP automation and use of fewer checks. A second challenge is how CFOs view AP automation in and of itself.

“CFOs don’t care so much about AP per se,” said Dan Drees, chief growth officer for AvidXchange. “They care about how AP automation can add value to their businesses.”

The good news is AP automation cuts time to process invoices and payments by reducing manual entry of data.

“Automation takes care of that and helps drive digital transformation and all its benefits. CFOs care a lot about that,” Drees said.

Because of this added efficiency, he added, operational loads on businesses can be broadly removed as they leverage software to do manual tasks finance pros are doing now.

Career fast track: Great financial storytelling

Turning to the subject of finance careers, the panelists shared their collective beliefs that a fast path to advancement in finance is through compelling and skilled storytelling.

Finance pros who can take numbers and translate them into emotionally moving stories about where the business is headed, and why, will climb career ladders especially fast.

“Based on your financial numbers, a finance pro needs to know what story they’re trying to tell,” said Tara Klein, vice president of finance with Graham Oleson, a digital marketing agency for the automotive industry. “They need to know if the story they’re trying to tell is of value to the business or if they’re missing the mark.”

Create flexible five-year plans

The panelists also emphasized the importance of finance teams planning up to five years out – while recognizing so much can’t be known.

“You can’t predict what’s going to happen in five years, but you still have to plan for it,” said Justin Schumacher, vice president of finance with JumpCloud, an enterprise software company. “You can do this by making sure you’ve got a strong handle on broad trends likely to be relevant for your business for the next five years.”

He also mentioned the importance of building flexible systems and software that can be quickly upgraded as future operational processes change.

“The more precision you bring to this planning,” he said, “the more nimble you’ll be as business, technologies, operations and strategies evolve.”

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