Making the Switch from Paper to Electronic Payments

Posted by Heather Miller  on Feb 11, 2016 06:00:00 AM

Topic: ALL

Business team looking over reports

Most companies are trying to determine the best way to streamline their processes, save money, and create efficiencies. Having the right electronic payment solutions in place can be crucial to realizing these benefits. Many businesses have discovered the advantage of improving their cash management with convenient and secure electronic methods, and are making changes to the way they accept and receive payments online.

Some of the hesitation to make the switch from issuing checks to electronic payments comes with a level of comfort in doing things the way the business is accustomed to. There is also a misconception that checks allow for additional float. In reality, the ambiguity surrounding mail delivery times can actually make a payment late, potentially causing the business to incur additional fees. With electronic payments, employees can schedule disbursements in advance for a specific date, allowing the business to manage when the funds will leave its account.

Other important factors to think about are the expense and the risk of issuing checks. Most people do not take into consideration the full cost, which includes the price of check stock, shipping (envelope and postage), as well as the time employees spend writing, mailing, collecting, and reconciling checks. According to the 2015 Association For Financial Professionals (AFP) Payments Fraud and Control Survey, 62% of companies were targets of payments fraud in 2014, and 77% of that fraud was attributed to checks. A particular check is handled by several people from the time it is written until it is deposited. This makes businesses more susceptible to fraud as the account number and routing number are on each check.

The most common forms of electronic payments are Automated Clearing House (ACH), wires, and credit cards. By using one of the above methods of electronic payments, businesses can proactively streamline their receivables and payables as well as secure information.

A strong banking partner can help a business assess its current processes and needs. They will be able to make recommendations on which electronic payment methods are right for specific  collection and disbursement needs, both now and into the future.

Learn more about Bank Mutual's Treasury Management solutions.