One of the more interesting trends in recent years has been the continual transition from paper-based payments (i.e. checks) to electronic payments. Electronic payments (sometimes called “e-Payables”) can take a variety of forms (see below); however, the fundamental goal is to lower processing costs and improve internal controls by removing paper and manual processes.
While data varies in how much it costs to process a check –I’ve found estimates ranging anywhere from $1.12 to $7.15 per check – experts agree that electronic payments are significantly less costly than the traditional paper check. They also provide other advantages like better fraud protection and, potentially, cash rebates.
While electronic payment solutions are not new, they have matured significantly in recent years. These newer solutions are more flexible and scalable, and make adoption easier for both the paying organization and its vendors.
In its State of B2B Payments 2015 Ardent Partners reported that a majority of vendors (52%) are now willing to accept payment electronically. I expect this number to grow as payment solutions and technologies continue to evolve, and B2B commerce becomes increasingly more automated.
As vendor acceptance of electronic payments continues to grow, more organizations are implementing these solutions to support their own efforts to streamline the accounts payable process. Organizations that have implemented one or more forms of electronic payment are finding the process extremely efficient. With the right solution, payments can be made directly from the accounts payable system. There is no manual work required to print, stuff and mail checks and remittances. And the reconciliation process is completely automated.
A/P departments are saving time and money on processing payments, reducing the risk of fraud and creating more scalability within their operations. No matter how big or small your organization, it’s worth exploring the benefits of electronic payments.
Learn more about one of the fastest growing forms of electronic payment in our free publication, The Nonprofit CFO’s Guide to Virtual Credit Cards. Download now.