Deluxe Corp. is bridging the gap between paper checks and electronic payments for small businesses by integrating its eCheck technology with Inuit Inc.’s QuickBooks accounting software.
The integration is expected to automate check writing and delivery for small and midsize businesses, many of which continue to rely heavily on paper checks to pay invoices, while allowing them to maintain the control over their cash flow that comes with the float a paper check provides. Float is the delay in the movement of funds between the payor and payee during the period after the check is cut and before the funds actually are debited from the payer’s checking account.
Deluxe’s eCheck technology, which the company acquired in 2015, allows businesses to create an electronic check, then send it to the recipient by email. Upon receipt, the payee can print out the check and deposit it at their bank just as they would a standard paper check.
“Integrating our eCheck service into QuickBooks allows businesses to electronically send a check directly from QuickBooks, maintain control over their cash flow, and reduce the cost of paying by check,” says Vijay Balakrishnan, vice president of e-payments for Shoreview, Minn.-based Deluxe. “eCheck is something many of our customers wanted as part of their accounting system.”
It can cost a business between $3 and $8 to generate and mail a single paper check, according to Deluxe. Small and mid-size businesses issue 406 checks per year, on average, according to a recent study by Biz2Credit, a New York-based small-business lender.
Deluxe selected QuickBooks as a partner because of the accounting software’s substantial user base. More than 2 million small businesses use QuickBooks Online, while 1,500 new small businesses begin using the online program every day, Deluxe says. Deluxe has about 4.5 million small-business customers. In 2017, companies using Deluxe’s eCheck technology generated checks totaling about $5 billion, compared to $2.4 billion in 2016 and $1.1 billion in 2015.
QuickBooks Online users can register which checking accounts they want to access for payment through QuickBooks by clicking on a link within their eCheck account. There is no cost to users to link Deluxe eCheck to QuickBooks. Pricing for Deluxe eChecks ranges from $30 for 50 eChecks to $245 for 500.
Once setup is complete, businesses can pay invoices directly from QuickBooks by clicking on the “make a payment” link. Users select the account they want to make the payment from and fill in the name of the payee, date, and amount. Payments can be scheduled to be sent on the due date or paid same day. Remittance data, such as which invoices are being paid, accompanies the check. A barcode is also included on the check that banks can scan to verify the check’s authenticity after it has been printed.
Balakrishnan adds that another advantage of integrating Deluxe’s technology with QuickBooks is that unlike a payment made through the automated clearinghouse, an e-check does not require the payee to provide bank-account data to the payor that can be intercepted by criminals as part of an ACH transaction.
“ECheck is a fast, secure service that allows businesses to automate check payments while maintaining the continuity of their accounting and accounts-payable processes,” says Balakrishnan.