With more and more businesses entering the digital age, there’s increased demand for digital accounting.
However, is this necessary for small businesses and worth the investment?
Let's look at the pros and cons of manual and computerized checks for small businesses.
Table of Contents
What is a business check?
Business checks are a popular form of payment used by businesses of all sizes. These can be both manually written and computerized. Business Checks aren't going out of style; over half of companies still use checks to make business-to-business transactions.
Ensuring checks are paid on time and correctly is important for any company, ensuring businesses can run smoothly due to making payments promptly. This is where computerized statements are adequate as they can be done automatically and electronically, providing no disruptions are caused, which could avoid loss of revenue or reputational damage.
While using computerized checks for smaller businesses has pros and cons, some companies may need help to afford accounting software. However, companies that use manual checks may need someone to ensure their books are in order. Using computerized checks alleviates the need for this as they can do this themselves.
Accounting software can range from $5 to $50 per month depending on your chosen level. As the business grows, you can change the level you see fit.
When writing manual checks, there’s a higher risk of errors being made, which could lead to financial losses; using computerized assessments avoids this issue as they’re produced automatically.
Ease of use
Using accounting software allows businesses to integrate tasks such as filing invoices, issuing pay slips, and linking to their online banking, meaning more time can be spent on running your business. Manual check users must complete all these tasks individually, meaning more time is taken away from the company or additional costs to hire someone to achieve these.
Businesses that have been using manual checks for a long time may be hesitant to change how the company operates and move to an entirely new accounting system. They may feel if manual checks have worked for them all this time, why is there a need to change now?
It’s essential to remember staff will need training on any new system to avoid any errors or mistakes; this will need to be planned into the business's schedule and budget.
Having everything kept in one place online ensures easy access to historical documents; this avoids any potential risk of documents being lost or damaged, which may be needed in the future. Paper records also take up space and can easily be misplaced or lost. As more businesses operate remotely, this only increases the need to have all documents in one place stored online for easy access.
With security being a top priority for customers, having all checks stored in one place online can be a point of worry for businesses as the potential for hacking is an ever-present threat. With manual reviews, these can’t be hacked and, as such, avoid these concerns. Good cyber security measures can alleviate these risks, ensuring your systems remain secure.
On the whole, there are clear pros and cons for both electronic and manual checks.
What's right for one business may not be for another, and the business's needs should be considered before making a decision. For small businesses struggling with day-to-day costs, this may be a luxury they can’t afford. However, there are clear long-term benefits to digital checks, such as better record keeping and reduced risk of errors, which could lead to further costs.
Computerized checks will only be for some; however, the long-term benefits may outweigh the short-term costs. We are in the digital age, so utilizing technology may be wise.