The Pros and Cons of Accepting Paper Checks

What are the Hidden Costs of Getting Paid by Check?

Banking has undergone a lot of changes over the past thirty years. From the mass adoption of Automated Teller Machines (ATMs) and online account management to the introduction of full-function mobile apps, people have more options than ever before. Today, customers can complete virtually every step of the banking process without stepping foot inside an actual building. Innovation and changes to financial regulations and transaction rules make it easy to deposit and move money from practically anywhere in the world.  

Despite all those advances and a knack for technology adoption, many MSPs remain behind the times in their banking and payment methods. Printing and manually sending out invoices and then waiting for the postal service to deliver paper checks can be a painstaking process, especially when they sit on the accountant’s desk until they collect enough to make a deposit. That timeline can stretch from weeks to months in some cases.

With the ever-increasing benefits of a strong cash flow, taking the slow payment route can stifle an MSP’s growth opportunities. Those delays reduce access to money the company could use to fuel its expansion plans, including hiring additional personnel, increasing sales and marketing budgets and onboarding new clients. Why should an MSP pay interest to borrow those funds from others when they could leverage their own reserves? Antiquated and slow payment processes impede those opportunities.

Are paper checks contributing to those problems? Many financial experts, including accountants, suggest that accepting that long-established payment method hinders cash flow and growth for MSPs. The counterargument is that many people and businesses are still more comfortable writing checks than setting up online accounts. Fearing that customers might go away, they maintain the status quo and hope that all of those payments really do get put in the mail reasonably quickly every month.

Those expectations rarely come to realization. Unfortunately, as many MSPs have come to discover, accepting paper checks has a number of negative effects on their businesses, including:         

  1. Traditional checks slow payments. While already mentioned, this point cannot be emphasized enough. Managing invoices and collections through conventional mail services can be lengthy, requiring days, if not weeks, just for message delivery. And, since clients rarely make out checks and send back those payments immediately, that timeline can stretch out much longer.  
  1. Paper is a security risk. Frank Abagnale, the renowned forger, turned FBI security consultant, travels the world pointing out the various problems with checks, including the lack of protection for the information they contain. From the name, address and phone number to the bank and authorized signature. Criminals can use the account and routing numbers to make online purchases, and checks are also easy marks for counterfeiters. All they need to do is intercept checks in the incoming mail or shuffle through the accountant’s inbox. Check out this article that outlines a number of these security-related concerns.
  1. An outdated approach for innovative companies. In IT businesses, image is everything today, and by accepting paper checks, MSPs can seem behind the times. That could turn into a real problem if someone misuses a client’s bank account. Not only could that situation significantly damage a provider’s reputation, but it will surely sour that customer relationship, which can be very costly if they have loose lips.
  1. Checks are inconvenient. Obsolete systems belong in the past. What kind of trust could prospective clients put in a tech company that relies on 20th-century methods when more secure and appropriate web-based solutions are available? An online payment portal eliminates all the paper and manual processes, making it easier for MSPs and their customers to manage payments with fewer headaches (and potential heartaches). ConnectBooster provides that type of automation with quality integrations to IT services-related tools and key accounting applications.     
  1. Collecting and processing checks is expensive. Contrary to popular belief, checks are one of the most expensive ways to collect payment because of their indirect costs. Yes, checks help MSPs avoid credit card processing fees, but that doesn’t mean they’re less expensive. Checks actually cost as much as the labor required to process payment, including accounting staff salaries, additional hours spent updating invoices in the accounting software and again in the CRM or PSA, trips to and from the bank and time lost to troubleshooting errors or partial payments. When other, more secure and convenient methods exist to lessen or eliminate credit card processing fees, accepting checks doesn’t make sense.

Less Paper = More Profits

Addressing the hidden costs of payment collection is critical for any forward-focused MSP—boosting the efficiency of those processes stimulates cash flow. To accomplish that goal, providers must assess and then eliminate or optimize various procedures and implement payment solutions their clients will appreciate and actually use.

Paper checks are antiquated and vulnerable to criminal behavior. Locking down payment and credit information in a secure online portal minimizes the risks for MSPs and the clients who entrust them with that data. Mandating the use of these systems—with few, if any, exceptions – will ensure greater protection and bring everyone into the 21st century. Signing up is relatively simple, and it won’t take long before payments come flowing in and cash flow moves in a very positive direction. 


ConnectBooster is an all-in-one accounts receivable automation tool that connects with the solutions MSPs rely on—CRM/PSA, quoting and accounting software. That powerful combination relieves the surprisingly high and often overlooked costs of getting paid. Schedule a discovery call to see how ConnectBooster can help you get paid faster, cheaper and more reliably.

Published August 25, 2022

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