![]() The good news is that there now exists functionality in check processing from an AP solution provider that can allow companies to keep this valued control at a much lower cost than the process previously described.įurthermore, in a post-COVID world companies enjoy the psychology of the security they feel in writing checks, and right or wrong, they believe they can get benefits from playing the game of check float to hang on to cash as long as possible.Ĭhecks are here to stay, so instead of casting them as evil we would do well to educate companies about how to mitigate check processing costs and related risk exposures. The approval process did add a meaningful cost for check processing at any company at which I worked or owned that had this process in place, the bigger the company in terms of payables, the larger the cost of this control. However, this process was far from efficient as I had to physically sign each check over a given threshold, and I could not easily assess the details behind a check. Thirty-seven percent (37%) of companies report that a main reason they write checks is that it is the preference of suppliersĪs a former treasury manager, CFO and CEO, I valued leveraging checks in that I had the control of having my signature and that of another finance leaders on checks over a given threshold, and the ability to review and approve a check myself if I wanted to dig into the invoices behind a check that needed my signature.Only 10% of companies make less than 10% of payments via check.Thirty-four percent (34%) of companies make at least 50% of all payments via check.30% of companies prefer to pay supplier via check than any other payment type.A few key survey results from the Payment Strategy – How and Why Companies Make Payments, based on 360 responses from finance and treasury leaders at US-based companies, include: In the Fall of 2020, Treasury Webinars partnered with Stampli to conduct a survey to help treasury and finance better understand the how and why of payments, and to deliver insights into how companies can achieve payment type optimization. It is time to stop bashing checks and help companies mitigate processing costs. From a processing cost perspective, checks may not be the lowest cost option, but there are other considerations that deserve to be part of the decision process relative to how to pay a supplier. Many companies still prefer to write checks, and technology now exists that empowers companies to mitigate check processing costs and maintain some of the controls that they leverage with checks, and prefer relative to electronic payments when writing checks. ![]() Technology and recent survey results have inspired me to change my stance on checks. I have been one to convey to Treasury & Finance leaders that they should stop writing checks as they are significantly more costly and can be risky relative to electronic payments. By Ernie Humphrey, CTP, Treasury Webinars
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