The True Cost of Paper Checks in Construction: 2025 Benchmarks and Digital Alternatives

While most businesses have transitioned from paper checks to electronic payments, many in the construction industry have been slow to make this change. Unfortunately, those businesses are throwing away a lot of money through inefficient processes, wasted time, and unnecessary costs.

Printing and sending paper checks can cost construction businesses a lot more than just time spent and supplies. It can eventually lead to increased prices for materials and services, lower work quality, and project delays.

In this article, we’re going to look at the true costs of processing payments with checks, including some hidden costs. We’ll leverage 2025 payments data to demonstrate the exact dollar amount lost, explore the hidden risks of fraud, and compare paper checks against modern digital alternatives like ACH, helping you process payments faster and cheaper.

The true cost of issuing a paper check goes far beyond the price of the stamp and the paper. For construction finance teams, every check represents several manual, time-consuming steps that add up to a significant labor cost per transaction.

Here’s a breakdown of the tasks that contribute to the high administrative overhead when processing a payment by check in the construction industry:

• Purchase check stock
  Blank check forms are printed offsite and delivered to the owner or contractor.
• Compliance checks
  Compliance checks are performed to ensure that each vendor meets the project contract’s requirements. This includes checking licenses, insurance, lower-tier supplier balances, and bond status.
• Payment approval
  The project manager or supervisor approves invoices for payment. This often occurs after the contractor receives payment from the project owner.
• Check printing
  Invoices are selected for payment in the accounting software, and checks are printed.
• Remittance printing
  If the remittance information isn’t included on the check stub or doesn’t fit, separate remittance instructions are printed.
• Signatures
  The printed checks are routed to the appropriate signer(s).
• Lien waiver printing
  If required, lien waivers are created and printed to be included with the checks.
• Envelope stuffing and postage
  Checks, remittances, and lien waivers are folded and put into envelopes, postage is applied, and the checks are sent out through the mail or other delivery service.
• Reconciliation
  The bank account statement balance is reconciled monthly using accounting software. Outstanding checks are listed in reconciliation reports and must be investigated if they aren’t processed within a reasonable time. If checks are stolen or misplaced, new checks must be printed and mailed, and stop payment applied.

The manual labor required to process checks translates directly into high administrative expense, making paper checks the payment method with the highest cost.

Industry estimates show that when factoring in supplies, bank fees, and labor time, it costs businesses an average of $4 to $20 to issue a paper check, with costs rising sharply based on payment volume and the complexity of the process.

Here is a summary of the factors and expenses that drive up the cost of issuing a paper check:

As mentioned above, construction industry payments have added tasks like checking compliance requirements and creating and printing lien waivers, which will add to the time needed to process payments. The times above are for general businesses and non-profits, not contractors specifically.

The data clearly shows a massive cost disparity between traditional paper checks and modern electronic payments like ACH (Direct Deposit). This comparison is critical for construction finance, where speed, security, and compliance drive vendor relationships.

The direct financial impacts of using paper checks are not all the costs associated with this payment method. Here are some other, often hidden, “costs” that you may not have thought of, now supported by the latest industry data:

• Harder to track bank balance
  With outstanding checks in the mail or waiting for the recipient to deposit them, it can be difficult to know exactly how much money you have in the bank. Neither your accounting software nor the bank will show the correct balance.
• Slower payments
  Paper checks slow down the payment process, leading to cash flow issues for contractors, subcontractors, and suppliers. Many have to rely on financing or credit cards to pay operating expenses while waiting for project payments. This increases operating expenses, leading to higher prices for materials and work. The $280 billion value of slow payments in the construction industry, reported in Rabbet’s 2024 Construction Payments Report, underscores the urgency of payment speed.
• Higher prices for materials and services
  Delayed payments lead to increased operating expenses, which causes suppliers and contractors to raise their prices. In addition, most suppliers and subcontractors raise their prices for the slowest payers to recoup some of the additional costs.
• Reduced quality of work
  Some subcontractors and suppliers choose not to work with contractors or owners who are notoriously late with payments. So these owners and GCs must look to newer, inexperienced subcontractors and suppliers, which can lead to lower-quality work.
• Project delays
  When payments are not made in a timely fashion, it can cause project delays. Materials may not arrive on site when needed if the contractor can’t afford to pay for them. Or a subcontractor may not be able to perform if they can’t pay their employees.
• Fraud and theft
  Checks are highly vulnerable to fraud and theft, and this risk is rising. The 2025 Association for Financial Professionals Payments Fraud and Control Survey Report highlights two critical findings:
  • Checks remain the most-targeted payment method, with 63% of respondent organizations facing attempted or actual check fraud in 2024.
  • The vulnerability of mailed checks is increasing dramatically, with 23% of organizations experiencing fraud through U.S. Postal Service interference—up from 21% in the previous year. This confirms that the act of mailing a check is now a significant point of failure.

The data is clear: relying on paper checks for construction payments is a massive hidden cost center. From administrative overhead costing up to $10 per check to the unacceptable risk of 63% check fraud confirmed by the latest industry benchmarks, manual payment processes actively hinder cash flow, delay projects, and damage key vendor relationships.

If you’re ready to eliminate these hidden costs, the solution is digital automation. Built’s Construction Payments simplifies the process, offering the benefits that paper checks cannot match:

• Payments are sent quickly with instant access to funds.
• Low processing fees.
• Reduced risk of fraud or theft by eliminating the physical mail chain.
• Automation that saves administrative time by managing compliance and waivers digitally.
• No outstanding transactions to reconcile or payments getting lost in the mail.
• Reduced cash flow issues.

Built’s Construction Payments product lets you pay your vendors easily and securely. Within our portal, you can:

• Make multiple payments at the same time
• Ensure that compliance documents are up to date
• Share payment status and details with vendors
• Provide secure onboarding for vendors
• Secure vendors’ financial information (Built follows strict SSL, SOC 2, and Data Privacy regulations)