In this 7‑minute YouTube monologue, Sachin Sharma – founder of ProcureDesk – argues that continuing to pay vendors with paper checks silently erodes a company’s bottom line. He outlines three primary ways checks cost money: (1) Time – the manual workflow of batching, printing, signing, mailing, and the need for additional headcount as volume scales; (2) Direct cost – an industry estimate of roughly $4 per check versus about $1 for a digital payment, which can amount to $12,000 annually for a modest volume; and (3) Error and fraud risk – lost or forged checks, cancellation fees, re‑issuance costs, and the lack of vendor self‑service for payment data. Sharma then adds a “bonus tip” about a non‑financial risk: delayed or inconsistent check payments damage vendor relationships, leading to poorer service levels and higher future costs. He concludes by urging viewers to automate procurement and accounts‑payable processes with digital payments, and includes a standard subscribe call‑to‑action.
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If you're still paying your vendors through paper checks, even though the process is familiar, sounds easy, but it is costing you money. And in this video I'm going to give you three areas where paper checks is costing you more money and you're not aware of it. And stick till the end where I will share one risk that you are to have with paper checks that's not even financial, but it is causing you poor vendor relationships. So if you're joining me for the first time, welcome. My name is Sachin Sharma. I'm the founder of procuredesk where we help growing companies automate their procurement and AP process and of course digital payments. So let's jump right in. Number one is time now to cut a paper check, right? You gotta create a batch, print it, get it signed, mail it, send the envelopes right. And all that. And all these activities cost time. Now you might not factor that all the time in, but if you think about scaling your company, if you're cutting five checks a month, it's fine. But when you have to cut 500 checks a month, that process doesn't scale and you have to always add headcount to make it work. The second aspect of this is you always need somebody to sign it and if they're not available, if you're physically signing, then you have to wait for that person to come back. And that again, you know, cause a lot of back and forth which is lost in productivity. And think about the time of the person who's signing, right? I think they have a better, better things to do than rather than signing checks. So that's number one time. Second is the cost. Now as per the association of Financial Professionals, the cost to cut a paper check is around $4. Let's do simple math. Let's say you make thousand payments per quarter, so that's $4,000. The cost of running a digital payment is around dollar or sometimes lower than that. So if you think about that on a quarterly basis, that's thousand dollars versus $4,000. So that's $3,000 that you're losing by cutting paper checks. And do it the math. Over a period of year, that's around $12,000 lost just on paper checks. And I'm assuming a very low volume because as the, as you scale your operation, this volume goes up the cost. Close, close up. So do the simple math. Look at how many invoices or payments you're making every month and consider that $4 versus $1 on the digital payment, right? Number three is the risk of error and fraud. So checks gets lost, they can be forged. Right. There are a lot of errors or frauds that's involved and a lot of times vendors don't get the payment and then you have to reissue the check. And sometimes you know, the check, you know, the bank might have ask for like a fee to cancel the check which could be as high as $25. So it's not cheap to cancel checks and so on. Checks might be uncashed and then you have to reissue the payments. There's lot back and forth goes on. So with a digital payment process, not only you are avoiding these risk of error and fraud, but also you could, I would say enable a self service where vendors are responsible for maintaining correct payment information, including their ACH information, their addresses and so on. So the information stays up to date and you are not involved in sort of phishing scam where you update the information by mistake and so on. Right. So now let's talk about the bonus tip where I said, you know, this is not even a financial risk but it's causing you vendor relationships when you issue payments through paper checks. A lot of times it's good for many companies. Think about this as a good cash flow strategy. Right. So we can always tell the vendor the payment is in the mail, right. Or the check is in the mail. And in a long term basis it doesn't help because companies start looking at you as a customer who doesn't pay on time and you always get deprioritized when it comes to, you know, servicing the customers. Now a vendor will never come and tell you but in our experience we have seen this over and over where if you just keep on paying the vendor late, eventually this will come back to you either in increased cost or, or I would say lower level of SLAs from a service standpoint. So always consider the these factors when you are issuing paper checks and the payments are not happening on time that eventually it's going to come and bite you. So just to summarize, Here are the three areas where paper checks are costing you money. Number one is time. Number two is cost $4 versus $1. And number three is the risk of fraud and reissuing to checks. If you like this video, feel free to hit subscribe button. That'll help us a lot. And you'll get notified when we release a video like this. And thank you for joining me today and I'll see you in the next video.
