Accounts Sayable Episode 1: The End of Paper Checks
The Federal Reserve Bank of Philadelphia once said that paper checks would end by 2026. But is that proving true – and if so, what does it mean for accounting firms today?
This is what we covered in Accounts Sayable Episode 1: The End of Paper Checks. Hosted by QuickFee’s Aubrey Amatelli, we were joined by Brenda Sleeper, Director of BRN Partnerships at the BDO Alliance, and Michele Eaton, Controller at McSoley McCoy & Co.
Major topics included:
- The true costs of paper checks (and other legacy processes)
- How the public accounting field is dealing with increased competition & automation
- Tips for building a more effective client journey
- Whether buzzworthy tech terms like automation and AI are worth the investment
Key Takeaways from Episode 1
“It’s not just about us mailing invoices and using checks… it’s also for our clients, and it starts with them.”
– Brenda Sleeper, BDO Alliance
Many CPA firms still rely on manual invoicing and checks for B2B payments. But research shows that check use is consistently slowing down, and in one PYMNTS survey, 40% of CFOs said they’re using checks less often this year than in 2021. A majority also said digitization was a top priority.
Another challenge: Paper checks are up to 10x more costly for businesses than electronic payments. The cost of mailing a single check can reach up to $26, with the average cost hovering around $5.91.
Where Do Checks Stand Now?
While the accounting industry can be resistant to change, our panelists agreed there were clear signs of shifting away from checks. This was true both with their organizations and with their clients.
“The process back in the day was to create an invoice, go to the copier, make two copies, use two envelopes to mail it [and collect the return payment], then process the check when it arrives. That all changed with online payments,” said Eaton.
New Tools to Streamline Invoicing
According to Juniper Research, the transaction value of domestic B2B payments will hit 54 trillion by 2023, or up from 49 trillion last year. Despite that shift, the average days sales outstanding (DSO) for firms is still relatively slow at 32 days.
This makes it critical to offer a convenient payment portal for clients. At a minimum, payment portals should include options for recurring payments, credit, direct debit, and the ability to schedule payments. These options can improve the firm’s accounts receivable even more when combined with automated workflows and integrations.
We’ve been using QuickFee for about 4 years, whereas the company we acquired did it more “old school.” One of their clients would typically pay their bill in 8 months… but when they came to us and used QuickFee, I received payment within a day. The partner of this company even emailed me and said “Michele, this client never pays right away, it usually takes them 8 months!”
Michele Eaton, McSoley McCoy & Co
Investing in Staff Success
Firms can save more than postage when they cut manual payment costs. You can also boost revenue in two other areas.
First, automated payments save manual time and effort, allowing teams to scale with more efficient processes. Firms are then free to prioritize retention efforts and other investments. Team members can focus on “big picture work” rather than data entry or filling paper envelopes.
Client Success Matters, Too
Going paperless also brings improvements in customer satisfaction. According to the 2022 Accounting Today Year Ahead Survey, almost 30% of firms said acquiring and retaining new clients is one of their biggest challenges. Between practice management systems, online payment portals, and remote collaboration tools, firms can now deliver a faster experience that clients will appreciate.
Demographic Change on the Horizon
Generation Z (born after 1995) will become the largest and most influential generation by 2025. They may also be the best-educated, most diverse, and most tech-savvy generation in American history.
So what does this demographic change mean for firms? Clients and coworkers alike will demand greater changes to processes in the future. On the retention side, you should provide flexibility, work-life balance, and remote or hybrid options. And on the client side – it’s crucial to offer convenience wherever you can before the “end of paper checks” truly arrives!
