What is the true cost of cheques?

What is the true cost of cheques?

September 12, 2016 Solicitors' Information 0

If your firm is still making payments by cheque you may be surprised to learn that the true cost of cheques is estimated to be £18.50 per cheque (1). Older estimates still put the cost at £13.00 (2). This is a non-recoverable business expense so it really makes sense to remove this overhead.

What is this overhead cost of cheques based on? There are three main categories involved:

Breakdown of the true cost of cheques

Cost breakdown for paper cheques

  1. Initiation and Authorisation Costs –- 62% these soft costs are often not recognised. These include how much time it takes to perform tasks and the cost of the labour involved. Staff salaries, benefits and holiday/sick time are considered when calculating these figures.
  2. Direct Costs — 22% Materials and Distribution segments in the pie chart: these are hard costs such as the cost of blank cheques, envelopes, bank transaction charges, as well as postage and/or courier expenses.
  3. Account Administration and Reconciliation — 16% these also include how much time tasks take and cost of staff time. Labour costs of £0.30 per minute for clerical staff to £0.75 for management time were used when arriving at the £18.50 figure1.


What does this mean?

This means that over three quarters of the cost of cheques are hidden costs, which you’re probably not account for. You are also losing out on opportunity costs – being able to ‘start the clock earlier’ on subject access requests by removing cheques being the prime benefit.



How to save money by removing the non-recoverable cost of cheques

We recommend using ShareMyXray as it handles electronic payment in addition to electronically transferring medical imaging. Instead of writing cheques, ShareMyXray bills you by DirectDebit, and in turn credits the hospital’s account immediately. This immediate credit means the 40 days timer for subject access requests starts straight away. Enter your email above to learn more.


  1. Amrit Grewal’s cost of cheques breakdown
  2. HR management software company PaySavvy determined the average cost at $17 in 2009 (link no longer accessible due to old encryption)

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