Alternative Payments

One-Third of B2B Payments Still Arrive by Check. Here’s the Hidden Cost

Earmark Team · July 1, 2026 ·

A $20 million windows business was doing what countless companies do every day: attaching their bank account information to invoices they emailed out. A bad actor intercepted one of those emails, swapped the bank details for an offshore account, hacked into the company’s system, and accessed their entire customer base. Then they blasted fake invoices to every client on the list. In just one month, they stole nearly $100,000.

What makes this story unsettling isn’t that it was sophisticated — it wasn’t. It was a predictable result of manual accounts receivable (AR) processes that millions of businesses still use today.

That story came from a recent webinar presented by Baxter Lanius, CEO and founder of Alternative Payments — a company focused on accounts receivable automation that has processed over $1 billion in payments and works with more than 1,000 customers, including around 100 accountants, bookkeepers, and controllers.

The session, hosted in partnership with Earmark, exposed something most of us know but rarely measure: the manual AR processes most businesses still rely on drain thousands of dollars from your clients’ bottom lines. Check processing, email-based invoice chasing, and hand-done reconciliation all add up. And with interest rates rising and margins getting squeezed, fixing these hidden payment costs through AR automation might be one of the best services you can offer clients right now.

The true cost of manual AR

Before you can fix a problem, you need to see it clearly. Most firms haven’t done the math on what manual payment processes actually cost their clients.

Let’s start with checks. Thirty-three percent of all B2B payments are still check-based. And each check costs between $10 and $15 to process when you factor in the time and manual labor needed to handle it. Think about a client processing a few hundred checks monthly. That’s thousands of dollars in hidden costs that never show up on the P&L, but they’re eating profits all the same.

Then there’s the security risk. As Baxter put it, “When you hand somebody a check, you hand them your bank account number and routing number.” It’s printed right there on the bottom of every check, and it’s a security hole hiding in plain sight. The $20 million windows company is an extreme case, but the risk exists every time a check changes hands. Add in lost packages and stolen mail, and checks become what Baxter called “a very inconsistent way to get paid.”

Another problem that compounds over time is days’ sales outstanding (DSO). When clients don’t pay for 30, 40, or 60 days, working capital gets locked up. And if your client pays their vendors quickly but waits forever to get paid themselves, they can wind up in a cash flow crunch.

“If clients aren’t paying you after 30 days or 40 days, don’t you think there’s a higher probability of bad debt expense or potential write-offs?” Baxter asked. When does a $50,000 receivable become a write-off? Day 60? Day 90? Every day increases the risk.

Manual reconciliation deserves its own spotlight. Baxter shared an example from a real Alternative Payments customer during the webinar. Before automation, the company had three people whose job was basically opening the bank account and refresh, refresh, refresh. If a customer paid, they’d try to match a $1,500 or $2,500 deposit to the right invoice. Then tie that to cash in the bank. All done by hand.

Then there’s the risk of human error. He admitted to fat-fingering bill payments himself and spent time chasing down overpayments. Some businesses still record credit card numbers on paper or store them in Excel files. That’s a PCI compliance violation waiting to happen.

Here’s what manual AR really costs your clients:

$10–$15 per check in processing labor
Locked-up working capital from long DSO
Fraud and compliance risks from exposed bank information
Hours of manual reconciliation every week
Higher bad debt risk on old receivables

The industry-wide context makes this worse. Only about 30% of B2B invoices get paid online today. Even among Alternative Payments’ established customers who’ve been on the platform for six months, only 70% of revenue flows online. The other 30% still moves offline, mostly through checks. The gap between where businesses are and where they could be is huge.

The macro environment makes this problem urgent now

These inefficiencies have been around forever. But today’s economic environment makes every one of them more expensive and more dangerous.

Start with the cost of capital. Everyone expected interest rates to fall, but that hasn’t happened. At the time of the webinar, Baxter estimated there was over a 50% chance rates would rise another 25 to 50 basis points in the year ahead. That changes everything about dollars sitting idle in your client’s AR pipeline. Money locked in unpaid receivables is expensive. Companies can’t reinvest it, use it to reduce debt, or earn returns elsewhere. What was a minor issue two years ago is now a real drag on profits.

Meanwhile, margins are getting squeezed everywhere. Minimum wages are climbing across the country. Hard goods costs are up. Revenue that can’t keep up with rising expenses magnifies every inefficiency. A manual AR process that was just annoying when margins were fat becomes truly threatening when they’re thin.

Small businesses are also failing faster. They’ve always been risky, but AI and automation, he noted, accelerate how fast weak businesses fail. Companies that don’t adopt efficient processes fall behind competitors who do. For accountants, this matters in two ways. First, your clients need help staying competitive. Second, if clients go under, you lose revenue. Helping them automate AR protects your own business.

Tying it all together, financial processes are, as he put it, “one of the last remaining components of our businesses that remain really manual.” We’ve automated marketing, sales, and big chunks of tax prep and bookkeeping. But actually moving and matching money still runs on manual effort in most firms.

AI is advancing rapidly as a tool for closing books and running operations. But Baxter made the point that it’s not about AI for AI’s sake. It’s about results. Whether automation comes from AI, workflow rules, or both, the goal is eliminating manual steps that waste time, create errors, and lock up capital. When all those costs are rising, there’s a clear return on automation.

The bottom line is, if your clients have capital tied up in inefficient AR, they’re paying more for that inefficiency than they were two years ago. If you’re not helping them fix it, someone else will.

Automation features that deliver measurable results

So the problem is real, and timing is urgent. What actually works, and by how much?

The webinar laid out specific features with hard numbers. This is the kind of data you can use to convince clients who are still on the fence.

Autopay is the biggest game-changer. When clients set up autopay, where a saved card or bank account gets charged automatically when invoices come due, their time-to-payment drops by 80% to 90%. That’s transformational. It kills the entire waiting-and-hoping cycle that makes DSO unpredictable. And it removes manual work on both sides. Customers don’t have to remember to pay, and your client doesn’t have to chase them.
Automated reminders are the second-most powerful tool. Alternative Payments’ data shows clients who get automated invoice reminders pay 66% faster than those who don’t. It makes sense. When reminders keep invoices top of mind, they never become those forgotten 120-day outliers that drag up average DSO. Modern platforms let you customize tone based on how overdue invoices are. A friendly nudge at five days. Firmer at 30. More edge at 45. They’re even launching an AI agent that can automatically customize these sequences.
Credit card surcharging saves money. About 80% of Alternative Payments’ clients pass credit card fees on to their customers, and it’s becoming the norm everywhere. Baxter shared a personal example from his insurance company, Chubb. The company told all policyholders they’d start charging 2.99% for credit card payments. So Baxter switched to ACH autopay. Problem solved. When 20% of payments are by credit card, 3% on that volume adds up fast.
Automated reconciliation eliminates the worst work. The platform handles daily payouts with full invoice-to-cash matching built in. When payments come through, it automatically matches them to invoices in QBO, Xero, NetSuite, or whatever system your client uses. No more marking invoices paid by hand. No more refreshing bank accounts, trying to match deposits. For audit prep, this automated documentation saves serious time.

Baxter shared a case study that put real numbers behind these features. S1 Technology was getting paid 30 days after due dates. Only 15% of clients paid electronically, and the other 85% wrote checks. They stored credit card numbers in Excel. After implementation, they cut collection times by 70% and drove major online adoption.

Two other features deserve attention because they solve common problems:

Multi-tenancy lets you manage AR for all clients from a single dashboard. You can click between client accounts, adjust automations, check what’s outstanding, and run reports, all without logging in and out of different systems. For accountants managing 10, 50, or 100 clients, this makes AR management scalable instead of a bottleneck.
Simple onboarding removes adoption friction. Many platforms require clients to fill out applications or create accounts before paying, and that’s where adoption stalls. The better approach is automatic. Alternative Payments creates accounts from integration data, ports over invoice history, and migrates payment methods so they’re ready when clients pay. The portal is white-labeled with your client’s brand, URL, and email, so it feels like their business rather than a third-party tool.

What this means for your practice—and your clients

Let’s bring this back to the numbers, the opportunity, and your next move.

Manual AR imposes a hidden tax that never shows up on financial statements — paper check processing, trapped working capital, fraud exposure, lost reconciliation hours, and growing bad debt risk. Each one is more expensive in today’s environment than it was two years ago.

Against that backdrop, the automation results speak for themselves. Autopay cuts payment time by 80% to 90%. Automated reminders speed collections by 66%. Firms using these workflows reduce overall collection times by up to 70%. Credit card surcharging is now standard for 80% of businesses on the platform, recovering about 3% on every card transaction. And automated reconciliation eliminates the most mind-numbing task in accounting.

For accountants, AR automation is a legitimate service line that delivers measurable value to clients while freeing your team from work that AI and automation are making obsolete. As traditional accounting services become increasingly commoditized, the ability to identify hidden financial drains and address them distinguishes advisory practices from commodity bookkeeping.

Alternative Payments also offers a referral program for accountants, with 10% lifetime commissions on referred clients, paid quarterly and managed directly through the platform. It’s another way AR automation can become a revenue stream, not just a cost-saver.

The full webinar goes deeper, including platform demos, workflow examples, and details on how multi-tenancy and integration with QBO, Xero, NetSuite, and other systems work in practice. If you want to see exactly what manual AR costs your clients and understand how to fix it, it’s worth watching.

A $50 Billion Company Couldn’t Match a Wire Transfer to an Invoice—And Your Clients Probably Can’t Either

Earmark Team · May 4, 2026 ·

Three years ago, Baxter Lanius received an email from a large software vendor, a company worth close to $50 billion, telling him he hadn’t paid his invoice. The invoice was a year old. Baxter checked his records, found proof of payment, and sent it back. The vendor responded, “Can you send me the PDF proof from the bank?” They’d received two wire transfers on the same day for the same amount, and they couldn’t figure out which one was his.

“I was like, oh my God, this is crazy,” Baxter recalled during a recent Earmark webinar, Build Predictable Collection Workflows That Improve Client Cash Flow. “How is a company this large having such a difficult time reconciling the transaction?”

If a $50 billion company can’t match a wire to an invoice, imagine what’s happening inside your clients’ businesses (or your own firm).

Baxter, the CEO and founder of Alternative Payments, has spent the past decade working with service-based businesses, including accounting firms, business process outsourcing companies, IT services, and even fast-casual restaurants and logistics companies. They all share the same problem. They struggle to get paid. And the costs are far higher than most realize.

The reality is, service-based businesses leave tens of thousands of dollars on the table each year because their accounts receivable workflows remain stuck in a manual, check-driven era. But as Baxter demonstrates in the webinar, by using four specific automation levers—autopay enrollment, automated reminder sequences, dynamic customer segmentation, and integrated reconciliation—firms can cut average collection times from 35+ days to about five, boost online payment adoption from 30% to 70%, and transform cash flow from a headache into a competitive advantage.

Accounts receivable is broken, and it’s costing you

This number should stop you in your tracks: $25 trillion. That’s the annual volume of B2B payments in the United States alone. And about 40% of that money still moves by check.

You swipe your credit card at the drugstore and use Apple Pay to order dinner. Consumer payments have been frictionless for years. But when one business pays another, we still stuff paper into envelopes.

Baxter pointed out this isn’t universal. In Brazil and India, most B2B transactions happen fully online. The U.S. banking system was so advanced so early that it created inertia. Countries like Brazil and India skipped the desktop generation and went straight to mobile, which forced their technology to accelerate faster. Meanwhile, American businesses built their workflows around checks decades ago and never fully let go.

The fragmented software stack makes everything worse. Consider your typical services-based business. There’s practice management software, a CRM, billing platforms, accounting or ERP software, and maybe a point-of-sale system. Each one handles a different slice of the client relationship. Data ends up stuck in silos, and reconciliation becomes a nightmare.

Then there’s the actual cost of processing checks. On average, each one takes more than ten minutes to handle and costs between $7 and $10. But the real damage is the stretched-out cash flow cycle. Your client writes a check and mails it. It arrives days later. You open it, deposit it, and wait for the funds to clear. Every step adds days to your working capital cycle.

And then there’s the fraud risk. As Baxter put it, “Everybody’s focused on cybersecurity and compliance and risk, but when you actually fill out a check and mail it, your account number and routing number are on the check.” You’re basically handing anyone who touches that envelope the keys to your bank account.

So what does this actually cost? The industry average time-to-pay for service businesses is 35 to 40 days. If you carry $1 million in accounts receivable and get paid in 40 days, reducing that to zero would put the full million into your bank account immediately. Even cutting it by 50% makes a huge difference.

Invoices typically get pushed to collections agencies in the 90- to 120-day range, though nobody wants to send a client to collections. The estimated annual cost for a typical firm is about $35,000, split between manual billing time and the cost of delayed payments.

The current economy makes this more urgent. Rising bank fees, increasing debt defaults, and inflation-driven labor costs are squeezing margins. As Baxter framed it, “This is the time to ask what we’re doing as business owners, what we’re doing as operators, what we’re doing with our clients to help automate some of these workflows.”

Four levers cut collection times from 35 days to five

Alternative Payments has worked with over 1,000 customers, processing more than $1 billion in payments. Its team identified four specific strategies that produce real results.

Lever 1: Autopay enrollment

If you ask Baxter for the single most important thing you can do, his answer is immediate. “If anybody asks me, what’s the secret sauce, it’s autopay.”

Get a client’s credit card or bank account on file and get their permission to pull funds automatically when an invoice is due. You can set this up during contracting or offer a small incentive to encourage enrollment.

The numbers are clear. Manual online payers who receive a digital invoice and choose to pay it themselves still pay an average of 9.5 days after the due date. For autopay customers, it’s just 1.7 days. That’s about an 80% improvement from one workflow change.

Across Alternative Payments’ platform, 62% of all payments are now fully automated, meaning no human touches the transaction from invoice creation through bank reconciliation.

Lever 2: Automated email reminder sequences

This lever sounds simple, but the data tells the story. When companies enable automated reminders, payments arrive 1.8 days after the due date. Without automated reminders, payments arrive 6.1 days after the due date.

“It’s pretty intuitive,” Baxter said. “If you receive an email from your vendor that says, ‘Hey, you owe us money, obviously that makes it very top of mind.”

Think of it as Mailchimp for collections. The customized email sequence runs automatically. Different customer groups can receive different messaging. Reliable payers get gentle touches. Slow payers get more frequent follow-up. The system handles everything without your team drafting a single email.

Lever 3: Dynamic customer segmentation

Instead of treating every client the same, you tag customers into groups based on their payment behavior. Frequent, reliable payers get fewer reminders with lighter language. Clients trending toward collections get a weekly follow-up with customized messaging.

“Nobody wants to manage payments. I get it,” Baxter acknowledged. “But cash flow is the lifeblood of your business. And if you can take a data-driven approach to really target your customers and segment your customers, you can get paid much more quickly.”

You set the rules once, adjust as needed, and the system runs the campaigns automatically.

Lever 4: Integrated reconciliation

This lever eliminates the most tedious back-office work. Full-cycle reconciliation means marking invoices as paid while also matching bank deposits to specific invoices with supporting documentation.

Without this, a payment hits your bank, you pull it into QuickBooks or your ERP, and you manually match it to the right invoice. Multiply that by dozens or hundreds of transactions, and you’ve got a full-time job that adds zero value.

Baxter shared that earlier in his career, “Every single time we won a new deal, we would hire people offshore to do this manual reconciliation for us because we didn’t have a system that owned the process soup to nuts.”

The platform can pull accounts receivable data from multiple systems, including practice management, accounting, and ERP systems, into a single consolidated view. Automations then run against that complete picture.

These four levers together typically drive online payment adoption from 30% to about 70%. S1 Technology reduced its days’ sales outstanding by about 70% by increasing electronic payment adoption from 15% to 90% in three months. Triada, a company with no prior collection systems and 100% check payments, cut collection times in half.

The estimated time savings is about ten hours per week on billing alone.

What’s next: AI collections and beyond

During the Q&A, a participant asked, “Do you see AI eventually helping with things like predicting late payments or prioritizing collections?”

“A million percent,” Baxter answered.

Alternative Payments is deploying an AI collections agent that reads incoming client replies and drafts appropriate responses. Payment confirmations, scheduling conversations, and even basic dispute resolution can all be handled without a human drafting emails.

“Often, these emails that you get back are pretty monotonous,” Baxter said. “Hey, I’m going to pay my bill. Hey, thank you for the reminder. I’m paying in 15 days.”

The platform is also building predictive late-payment scoring using multiple data signals, including historical payment patterns, invoice characteristics, external news about clients, and even Dun & Bradstreet business data checks. You’ll know which clients need attention before invoices go overdue.

For the 30% of revenue that still arrives via direct wire or check, AI can now read bank feeds, identify deposits, and automatically match them to outstanding invoices. That last chunk of manual reconciliation work starts to disappear.

Looking ahead, Alternative Payments was preparing to launch accounts payable at the time of the webinar. The vision is a unified financial operating system with AR on one side, AP on the other, and reporting and analytics in the middle, all integrated into your existing software stack.

Many firms are discovering a new revenue stream. Those who previously avoided AR management because it was too painful now offer it as a service, charging clients hundreds to thousands of dollars per month for work that’s largely automated on the platform.

The company also offers a referral program with 10% revenue share for partners who bring in new customers, complete with a dashboard to track referrals and earnings.

Time to automate the monotony

Returning to the story that kicked off the webinar, if a $50 billion company can’t match a wire transfer to an invoice, it’s almost certainly happening inside your firm and your clients’ businesses, too.

As Baxter asked during the webinar, “Where do you want to focus your time? You want to focus your time on providing the best service to your clients. You don’t necessarily want to focus your time on the monotony of collecting, sending out emails, reconciling cash, and reconciling invoices.”

Watch the full on-demand webinar below to see exactly how these automation levers could transform cash flow for your firm and your clients.