As the digital payment era ramps up, small and mid sized businesses (SMB) are still utilizing checks to make purchases and payments, as are their retail customers. According to Biz2Credit, “SMBs issued an average of 406 checks per year compared to retail customers, who write around 50 checks per year.”
In the study, “bank statements of more than 18,000 companies across multiple industries. The study covered 2.2 million expense transactions totaling $2.8 billion made by firms that uploaded primary data onto the online small business finance marketplace.”
Surprisingly, checks are used very frequently with companies generating under $250K in annual revenue issuing 133 per year and firms of more than $5 million in annual revenue issuing more than 1,000 per year. When broken down by industry, information technology (IT) and professional services utilize checks the least at 13% and 19% respectively. Construction is the highest at 47%.
An age gap is also evident with younger small business owners (aged under 35 years) issuing “far fewer checks than business owners aged 55 or over (238 versus 641 per year on average).”
Checks still matter in today’s day in age as older owners feel more comfortable with them and both younger and older owners use it as a way to manage cash flow.