Best Practices in Payments
Like invoices, paper checks continue to stubbornly hang around. Maybe it’s because, historically, payments were expected to have some kind of heft to them, whether it was a livestock exchange, raw gold or silver, minted coins, treasury notes, or paper checks with someone’s signature written in real ink.
While such things were once the best practices in payments that’s all in the past. The new world of electronic payment has proven safe, reliable, efficient, and less prone to error and fraud. The three most used forms are Automated Clearing House (ACH), virtual card, and wire transfers; and each of these is secure and cost-effective. All are more convenient than paper checks, and far faster in terms of processing time, too. Moreover, any electronic payment method is preferable to paper checks when automating your accounts payable department. Here are the four main reasons.
Efficiency: Electronic payments help the accounts payable department get things done a lot faster. Just as electronic purchase orders and supplier invoices are sent back and forth with little effort, electronic payments keep the initial speed going. By contrast, paper checks have to be written out, copied, logged, and put in the mail, thus causing the whole workflow to bog down once again.
Cost: Electronic payments are not just fast, they’re cheap. In fact, it’s been estimated that they are 44% less costly than paper payments. That doesn’t even take into account the fact that they contribute greatly to the ability of AP departments to not just avoid late fees but take advantage of early-pay discounts.
Convenience: Electronic payments can be made directly from your computer, wherever you happen to be at the time. There is no need to keep track of checks and reconcile checking account ledgers. Suppliers are happier, too, because the payment clears immediately without having to wait in line at a bank.
Security: Every seasoned white-collar crime prosecutor has a story to tell about embezzlement, and most of those stories involve paper, as in paper checks, paper ledgers and paper invoices. It is far easier to forge or intercept and alter a paper document than an encrypted electronic payment. The solution is to cut out paper altogether with the use of accounts payable automation like that covers every base and works well in tandem with electronic payments.
Electronic payments are the best practices in payments today and are the preferred method with leading electronic invoicing solutions. It just completes a best practices system that can speed up your workflow from receipt of invoice to payment, while saving your company a lot of money.