In this 2026 video, CPA Bill Hanna draws on two decades of experience as a corporate controller to explain why many businesses continue to pay vendors with paper checks instead of ACH or other electronic methods. He outlines three primary categories of reasons. First, the "mail float" – the combined time of printing, mailing, depositing, and clearing a check – gives payers a controllable delay that can be used to manage cash flow. He details numerous practical issues that extend this delay, such as lost or mis‑addressed mail, damaged checks, endorsement mistakes, wrong amounts or payee names, signer unavailability, and mobile‑deposit rejections. Second, legacy habits and systems: many accounts‑payable departments still run on check‑centric processes, value the tangible paper trail, and face bureaucratic approval layers that make switching to electronic platforms costly and time‑consuming. Third, fear of electronic fraud: concerns about phishing, the inability to stop an electronic transfer once sent, and a perceived (though often false) segregation‑of‑duties advantage keep firms attached to checks. Hanna concludes that these inefficiencies are not bugs but intentional features that shift payment‑delay burdens to vendors, and he urges viewers to like and share the video.
Chapters
Over my career as a controller, many customers paid me via check. Many times the check got lost in the mail or was sent to the wrong address or written out to the wrong entity or for the wrong amount. Sometimes I damaged the check in the process of opening the envelope, and sometimes I endorsed the check with the wrong account number. All of these issues give the customer an advantage, a time delay to manage their cash flow. We are in 2026 and I am surprised to see so many businesses still paying vendors via checks as opposed to ACH or electronic transfer. So in this video, I'm going to show you from my perspective as a controller, the 3 main reasons why companies pay via check. The first one is going to be the mail float or how to delay payments to manage cash flow. The second is going to be old habits die hard, essentially legacy systems. And the third is the fear of electronic fraud. So if this sounds good to you, let's dive right in. Hey guys, in today's video, we're discussing why companies choose to pay via check versus electronic transfer even now in 2026. And this is from my experience as a controller working in the last 20 years in corporate accounting. The first reason has to do with the mail float, or how long it takes from printing the check all the way to clearing. So imagine this. The time to print a check plus the time in transit plus the time to deposit plus the time to clear in the bank. All of this adds to the amount of time that you have that helps you manage your cash flow. Also, there is the concept of controlled timing of payment. With ACH payment or electronic transfer, you often have no control, or you have some control over the timing of payment, but most cases the timing of payment goes by the due date. So due date on the invoice goes in the system and the electronic transfer is triggered on the due date. You could have some say around that, but most of the time it goes by the dates that are already in the system for the payment term you have with the vendor. With physical checks, however, you get the control over when to actually physically mail the checks out and send them in the mail. So you have this extra layer of control timing of payment. On top of that, you have the internal processing lag. So this is the time it takes to print, sign, mail the check. All of that takes time that adds in into the delay. The other aspect is lost in the mail. So when you send out a check to a vendor, you don't necessarily have a tracking number around the mailing of the check, right? So a lot of times you get an answer from a customer that says, hey, the check was sent out and most likely got lost in the mail, right? This is another aspect that adds to the time of how long it takes for the check to clear. Another issue that happened to me a lot, especially as a junior analyst, is damaging the check in the process of opening the envelope. So before I became an experienced controller, when I was an analyst, I used to receive an envelope with a check and I was inexperienced in how to open that envelope. And if I open it in the wrong way, I may by accident tear the check. And now I have a torn check that cannot be used and I have to reach back to the customer, have them void that check and issue a new one, which now we are starting back at square one. Start the entire process again, right? So it adds to the time delay for when the funds reach the vendor. Now, one more issue that can add to the timing delay is endorsement mistakes. An endorsement is something that you have to do to every check that you receive in the mail. You flip the check and in the back of it you endorse the check. This endorsement could be an actual stamp that you have, so that's fast. And with the stamp, the mistakes are rare, right? Because the stamp, as long as you have the stamp in your hand, you stamp the check. Now it's endorsed and then you can deposit the check. But in some cases, if you don't have a stamp, you have to write on the back of the check, writing the, um, this is for deposit only, uh, the company's name, my company's name, and then the account number. And in doing so, if you write the company's name wrong or if you put the account number with the wrong digit, now the bank has a chance to say, hey, I'm not going to clear that check with the wrong information, right? So that could start the process all over again where you have to reach out to the customer, void the check, and get a new check. And if these are not enough issues, let me give you another scenario. Now, what if the wrong amount is on the check? Instead of being $10,000, they pay you $8,000 or $100,000. Could be under or over. Now you're dealing with another kind of issue, right? With an electronic payment, if you have an under or overpayment, you can deal with it electronically. You can get paid the extra that you're owed electronically, or if you're overpaid, you can refund back electronically. Now, with the check, if the amount is wrong In most cases, you have to reach back out to the customer and get a new check, which resets the whole process. Now, if these weren't enough issues, picture this: when you get an answer that says that the signer is out of the office on vacation. So this has to do with sometimes corporations are small enough to have an actual person, a signer, physically sign the check for it to be mailed out, right? In many cases, if the company is big enough, the checks are pre-printed already with the officer's signature, and then you won't have this issue. But if the company is small enough, then somebody is signing. And in this case, if this person is out of the office, then you're out of luck, right? You have to wait for them to come back from their vacation. Another issue that I've seen is the wrong entity name. Now, that means that the payee on the check is misspelled or written incorrectly, right? And in that case, the bank may reject the check. This often happened during the setup of a new vendor for the customer. Once it's set up correctly, then this obviously won't happen. But it happens with the first check sometimes you get and you have the wrong entity name. Therefore, the check cannot be cashed. Sometimes a check gets sent to the wrong address, which, whoops, just buys more time. This often happens if your company moved from one address to the other and failed to notify all of its customers. Now your checks are going to the wrong address, right? This is not then on the customer, this is on you as a vendor. You haven't updated the records with the customers correctly, but this happens often enough for it to create an additional time frame for the cash flow management for that particular customer. Also, you have mobile deposit issues. So most often now, after the pandemic, a lot of the deposits are done via mobile deposit, right? You don't actually go to the bank directly. You either use your phone to mobile deposit a check, or you use a device that you get from the bank, which is a remote deposit capture device, right? If you make a mistake with taking a bad photo or a bad scan with the machine that you receive from the bank, in either case, the check is going to be rejected for deposit. right? That's going to add another layer of time for how long it takes to get the funds cleared in the bank. If this video is providing you value and now you're understanding some of the tactics companies use to delay the payments to their vendor, hit that like button and share the video with someone who you think will benefit from it. Now, let's talk about the second category of reasons, which is old habits die hard, right? These are legacy systems we're dealing with. Some accounts payable systems in many companies, even today in 2026, are just built around checks, right? We've always done it this way. You hear this from their staff. The accounts payable staff has always sent out payments via check, and so everybody is resistant to new systems which take effort and training, plus the additional layer of risk in implementing a new system. Implementing an accounts payable and payment platform can take a little bit of time, between 2 to 6 weeks, but often adds a lot of control and streamline the process of paying your vendors. In many of these companies that resist moving off of legacy systems, there is an approval bureaucracy, meaning there are multiple signers that are required on different levels of payments, which you can achieve with, with an accounts payable platform. But these companies just choose to continue with what they know rather than dealing with the unknown. There's also this comfort, or really a false comfort, around having the paper trail of the check. You have an actual physical check with a pay stub attached to it, and then the invoice stapled together with that check. Right? And so this is sort of a comfort that you get from having a paper trail in your hand as opposed to a trail in the cloud, right? So there's a comfort in having something physical with you. The third category of reasons why companies choose a check via an electronic transfer has to do with the fear of electronic fraud, right? When you are dealing with electronic payments, you're dealing sometimes with emails that you receive as an accounts payable team. This could be phishing emails that have a link Once you click on this link, it will either collect some information or ask you to perform a certain action online that collects some information. With the payment via check, you don't have that aspect that you have to get a link, click on it, or make a payment online, right? So with a check, you can also place a stop on that check, right? You cannot do this with electronic transfer. Electronic transfer, once it's disbursed, it's out there already being received by the other entity While with the check, if you make a mistake, you have this window of mailing where you can go to a bank and say, "Hey, place a stop on check number XYZ," and then they will place a stop on that check if they catch it in time. So there is this perceived control over electronic fraud. There is also a sense of segregation of duties. Again, this is a false sense of comfort from segregation of duties because you can achieve the same thing via an accounts payable platform like Bill Hanna or other platforms as well. Right? With a physical check, you have this process of the invoice being received, printed out, someone reviews it, somebody else looks at the check and the payment, signs on it. Sometimes there's a second signatory who's required for the payment to be made if it's above a certain amount. So there is a false sense of segregation of duties. Again, you can achieve the same thing with an electronic payment. It's just that many companies are resistant to making that change. So in summary, some companies choose to pay via check over electronic transfer to manage their cash flow. It adds an additional time delay for the money to get cleared in the vendor account, and that helps them with cash flow management. In some cases, the choice is made because it's a legacy system. Companies are resisting the change to electronic payment. So checks shift the burden to the receiver, right? Every delay, error, accident benefits the payer, right? It delays the payment process. The inefficiency isn't a bug in this case, it's the main feature. Okay, I enjoyed making this video. I hope that you liked it. Give it a big thumbs up in this case, and I'll see you in the next video.
