Checks vs. ACH

“We take checks. We’ve always taken checks. Why should we change now?”

If this sounds familiar, you’re not alone. Many MSPs cling to check payments out of habit or perceived convenience. But here’s the truth: while the direct financial cost of ACH versus checks might seem similar on the surface, the real value lies much deeper.

In this post, we’ll explore how switching to ACH can transform your MSP’s financial operations by:

1. Eliminating payment delays
2. Saving valuable time
3. Reducing payment-related hassles
4. Creating more predictable cash flow

The bottom line? ACH frees up resources you’re currently pouring into payment logistics. Those resources can be redirected to enhance your services, expand your client base, or invest in your team’s skills.

Let’s dig into the real cost of clinging to checks – and why ACH is more than just a modern payment method; it’s a tool for operational efficiency.

The Hidden Drain of Check Payments

Those paper checks are costing you more than you might realize:

1. Time Wasted: Every check requires manual processing. That means opening envelopes, logging payments, making bank runs, and reconciling accounts. It’s not just tedious; it’s expensive when you factor in labor costs.
2. Delayed Access to Funds: Checks come with float time. While a check might be in your hand, the funds aren’t in your account. On average, it takes 4 days to receive a check, and another 2-3 days for it to clear, compared to 2-3 days for ACH. That’s 4 days you could be putting that money to work for your business.
3. Higher Risk: Let’s face it—checks are vulnerable to fraud and errors. A misplaced decimal point or a forged signature can cause headaches that last for weeks.

ACH: More Than Just a Modern Alternative

Switching to ACH isn’t about following a trend—it’s about streamlining your payment process, reclaiming valuable time, and significantly reducing payment delays. When you transition to ACH, you’re optimizing how your MSP handles incoming payments from start to finish.

One of the most significant advantages of ACH is eliminating the transit time for checks. With paper checks, you’re at the mercy of the postal service. Checks can take days to arrive, get lost in the mail, or end up sitting in a client’s outbox. This unpredictability can wreak havoc on your cash flow projections and delay access to funds you’ve already earned.

Once the check finally arrives, the process is far from over. You still need to deposit it, either by using a check reader, driving to the bank or using a mobile app—which often requires multiple attempts to capture the check correctly. While depositing a check might be free, it’s these hidden costs of time and effort that add up, pulling you away from more valuable tasks that could be growing your business.

In contrast, ACH payments are initiated electronically, eliminating transit time entirely. Funds typically clear in 2-3 business days after initiation, providing a level of predictability and speed that checks simply can’t match. This means you can put that money to work for your business sooner and with more certainty.

ACH transactions also offer enhanced security through encryption and regulation, dramatically reducing your exposure to fraud compared to paper checks. Plus, the improvement in record-keeping is substantial. With Alternative Payments’ system, every ACH transaction is automatically recorded and easily traceable. This integration streamlines your accounting processes and provides clearer financial visibility. Our platform offers a level of automation and accuracy that manual check processing simply can’t match, making audits and financial planning much simpler for MSPs using our solution.

In essence, while the direct financial cost of ACH versus checks might seem similar on the surface, the real value lies in eliminating payment delays, saving time, and reducing payment-related hassles. It’s about creating a more predictable cash flow and freeing you and your team to focus on what really matters – serving your clients and growing your MSP.

The Auto-Pay Advantage

Now, let’s talk about the real game-changer: ACH with auto-pay. This is where the benefits of electronic payments truly multiply. With auto-pay, you’re not just streamlining your payment process; you’re creating a predictable, reliable cash flow for your MSP.

Imagine knowing exactly when each client payment will hit your account. That’s the reality with auto-pay. This predictability allows for more accurate forecasting and better financial planning. You’re no longer left wondering when a check might arrive or when a client might remember to initiate a transfer.

Moreover, auto-pay dramatically reduces late payments. Our data shows that MSPs using auto-pay see on-time payments improve by an average of 86%. That’s a lot of time saved on chasing down late payments, allowing your team to focus on value-adding activities instead of collections.

1. Consistent Cash Flow: Imagine knowing exactly when each client payment will hit your account. That’s the reality with auto-pay.
2. Dramatic Reduction in Late Payments: Our data shows that MSPs using Alternative Payments auto-pay see on-time payments improve by an average of 68% compared to payments made on our platform manually. That’s a lot of time saved on chasing down late payments.
3. Decreased Collection Efforts: With auto-pay, your team spends less time on collections and more time on value-adding activities.

Real Numbers: The ACH Impact on MSP Finances

Let’s look at some concrete figures that demonstrate the impact of ACH, especially with auto-pay, on MSP finances:

1. Faster Payment Cycles: On average, our MSP clients get paid 16 days faster with ACH compared to checks. That’s more than two weeks of improved cash flow for every invoice.
2. Improved Cash Flow: This faster cycle means more working capital at any given time. For a mid-sized MSP billing $100,000 monthly, getting paid 15 days sooner could mean an additional $50,000 available in your account at any given time.
3. Time Savings: MSPs report saving an average of 20 hours per month on payment processing and collections efforts after switching to ACH with auto-pay. That’s 240 hours per year that can be redirected to growing your business.

These numbers paint a clear picture: ACH, especially when coupled with auto-pay, isn’t just a convenience—it’s a strategic financial tool that can significantly impact your MSP’s bottom line.

Addressing Common Hesitations

We understand that change can be daunting, but let’s address some common concerns with hard facts:

1. “My clients won’t like it.” Actually, this couldn’t be further from the truth. According to the Association for Financial Professionals (AFP) Digital Payments Survey, only 33% of business-to-business (B2B) payments in the United States and Canada are still made by check as of 2022. This means a whopping 67% of B2B payments are already made through electronic methods. Furthermore, over 67% of businesses indicate they are likely to shift to digital B2B payments in the next few years. It’s often the MSP, not the client, who’s hesitant to change.
2. “It seems complicated.” With the right partner, transitioning to ACH can be surprisingly smooth. At Alternative Payments, we typically have MSPs up and running in 30 days or less. Our team handles the heavy lifting, ensuring a seamless transition for both you and your clients.
3. “What about the fees?” When you factor in the time saved, faster access to funds, and reduced risk, ACH often comes out ahead financially, even with nominal transaction fees. Remember, we charge nothing for ACH transactions, so your direct costs remain the same while you reap all the benefits of faster, more reliable payments.

By addressing these concerns head-on with data and practical solutions, we aim to show that the switch to ACH is not just feasible, but advantageous for both MSPs and their clients.

A Success Story: 5K Technical Services

5K Technical Services (“5K Tech”), an MSP serving Northeast Texas, transformed their payment processes with Alternative Payments. Before the switch, they relied on checks, resulting in poor payment visibility, long collection cycles, and numerous client emails requesting invoice information.

Within 90 days of implementing our solution, 5K Tech saw remarkable improvements:

• All payments now processed online through a branded portal
• Only 12% of invoices overdue after 90 days (down from numerous 90+ day overdue invoices)
• Processing fees reduced by over 70%
• Significant reduction in admin time spent on payment-related tasks

Corey Kirkendoll, CEO of 5K Tech, reports: “Making and accepting payments has never been so easy. The system just works. We used to have a bunch of invoices age 90+ days. After transitioning to Alternative, invoices rarely make it beyond 30 days overdue.”

This real-world example demonstrates how transitioning from checks to electronic payments can dramatically improve an MSP’s cash flow, reduce overdue invoices, and enhance the overall customer experience.

How Alternative Payments Can Help

We specialize in making this transition smooth for MSPs:

• Seamless integration with popular PSA tools like ConnectWise, Autotask, and HaloPSA.
• A user-friendly client portal that makes adoption easy for your customers
• Support for both ACH and credit card payments, giving your clients options

It’s Time to Rethink “We Take Checks”

The “we’ve always done it this way” approach to payments isn’t just outdated—it’s actively holding your MSP back. With ACH, especially auto-pay, you’re looking at faster payments, improved cash flow, and less time wasted on manual processes.

Ready to step into the future of MSP payments? Let’s talk about how Alternative Payments can help you make the switch to ACH and start seeing the benefits in your bottom line.