Wall Street Journal – These days it’s easier than ever to pay for goods and services – without cash, card, pen or paper featuring anywhere near the transaction. Most financial obligations can even be met with just a few taps on a smartphone screen. But for American businesses, the old-fashioned paper check remains the preferred payment method, writes CFO Journal’s Vipal Monga, and that legacy comes at a cost.
A survey last September by the Association for Financial Professionals found U.S businesses still pay half their bills by check. “In this day and age it doesn’t make sense,” says Mr. Ken Goldman, chief financial officer of Black Duck Software Inc., which employees 200 staff. “It’s like sending a letter when there’s email.” Paying by check when a computer screen will do is not just a question of making sense, or of being a more efficient use of the CFO’s time: it’s costing the U.S economy.
Issuing and depositing checks cost U.S. businesses between $26 billion and $54 billion in 2010, according to MineralTree Inc., an electronic-payments company. And Bank of America estimates that a business check can cost an aggregate of $4 to $20, based on the price of the check and shipping, plus the time employees spend writing, mailing, collecting and reconciling the check. In e-payments, U.S. companies lag behind Europe, Japan and Brazil. American businesses and consumers wrote 21 billion checks in 2012, according to the Federal Reserve. The European Central Bank says that’s more than four times as many checks as were written that year in the European Union’s 28 member countries.
The NFIB Small Business Survey is released at 7.30am EST. The NFIB Small Business Optimism Index for January was up 2 tenths to 94.1. Other readings were mixed with hiring plans up and at a new recovery high but with earnings trends and expansion plans down, Bloomberg notes.
Caesars Entertainment and its spinoff company Caesars Acquisition Co. report fourth quarter earnings today, notes Ahead of the Tape’s Spencer Jakab. Analysts polled by FactSet predict Caesars Entertainment to record a loss of $1.71 a share compared with a per-share loss of $3.75 in the same period a year earlier, which would be the company’s second-narrowest quarterly loss in its history as a public company.
