Managing your expenses can be time-consuming, especially when checks are involved. Tracking down supplier payments, reconciling checks, and monitoring employee spending ties up valuable time and resources.
Use of electronic payments is growing faster than ever as companies seek to gain more control over expenses and spend less time on paperwork.
In a survey conducted by the Association for Financial Professionals (AFP) and sponsored by Truist, only a third of businesses said they currently use electronic payments for vendor transactions, but nearly 60% said they’re likely to convert most of their payables from checks to electronic forms of payment.1
There are many benefits to adopting digital payment methods. Electronic payments can help you:
- Reduce the risk of fraud from checks.
- Take advantage of vendor discounts through faster payments.
- Enhance purchasing decision-making by offering clear visibility into your payment and collections data.
- Lower administrative/staffing costs through simplified payment-related processes.
- Control employee spending with electronic purchasing and payment cards.
- Predict and manage your cash levels precisely with more accurate information.
- Streamline your cash flow management by minimizing the hassle of expense reports and receipts.
- Earn discounts through rewards programs.
Electronic payments can also be integrated with your financial software and online banking tools to give you an up-to-date picture of your finances. Real-time financial reporting helps you manage your cash flow better so that you can keep your business operating smoothly and efficiently.
Ready to begin?
Switching to electronic forms of payment doesn’t happen overnight, but here are some easy ways to get started:
- Credit and purchasing cards – Using cards to pay your vendors is one of the most easily implemented methods of electronic payment.
- ACH payments – Ask your vendors if you can pay with ACH drafts or wire transfers for same day or scheduled payments. Electronic data interchange (EDI) software can eliminate paper purchase orders and invoices.
- Direct deposit – Your bank can facilitate electronic payroll transfers to your employees.
- Consolidated payables – You can send your bank a single electronic file to automate disbursements—card, ACH, wire, or check—for each payment cycle.
Primary benefits of sending payments via electronic payment methods1
- Straight-through processing to accounts payable or accounts receivable and general ledger 49%
- Cost savings 45%
- Improved cash forecasting 42%
- Speed of settlement 42%
- Improved supplies/customer relations 37%
Encourage your customers to pay electronically and make it easy for them to do so. Be sure to include links to credit card, ACH, and/or wire transfer payments in every email and invoice.