It’s 2018, most of us don’t write checks anymore and if we do, it’s a rare occasion.
Then why is your accounts payable department is still issuing check payments to vendors?
If you are issuing checks, you are missing out on a tremendous opportunity that many businesses have realized and capitalized upon. Businesses just like yours. By digitizing accounts payable payments, companies not only save tremendous cost, they have reduced their fraud-risk and they may also be reaping benefits of cash-back rebates paid monthly.
By updating your accounts payable process to a digitized system, your company will save an average of $3.50 to $5.00 per check, which is an amount that most companies agree it costs them to get a check out the door. If A/P is issuing 500 checks each week, you’re spending between $1,750 and $2,500 a week on the process. Annually that add up to $91,000 - $130,000 in expense.
By digitizing your accounts payable payments you can save more than you spend because effective electronic payment programs will convert 80% of your payments to digital payments. Using the same scenario, saving somewhere between $72,000 and $104,000 each year.
Furthermore, your team gains efficiency. Gone are the days of ordering supplies, printing, folding and stuffing checks to mail…Here come the days of digital transactions and online reporting and reconciliation to make settling payments a breeze.
The most enticing digital A/P programs include virtual credit card payments which allow you to employ a secure credit card payment for your invoice payments – yet keep those payments running through your controlled and managed A/P processes. The cards are issued on a one-to-one basis for each vendor and an approved dollar amount. It’s amazing…without providing a card over the phone or an open line of credit to a vendor, you can earn approximately 1.25 or 125 basis points in rebates paid each and every month. THAT turns your accounts payable cost center into a profit center.
While many accounts payable departments make use of purchasing cards, those programs are limited and restricted and don’t touch the majority of the spend in a company. A $200 million dollar company most likely averages $60 Million in annual Accounts Payable spend. By deploying a virtual card program for accounts payable and migrating only 30% of the spend into a card program, a company can potentially earn $120,000 per year in rebates.
That's real money. Overall, the net impact of migrating to digitized paymentson this sized business can be in the $200,000 range each year. That's real money!
It's time to digitize payments and it's time for you to join the movement! Calculate your company's potential ROI for migrating to electronic accounts payable here.
Learn more about digitizing payments and electronic accounts payable automation by reading these related blogs:
In today's digital world, no one really uses checks regularly for their personal transactions. Ask anyone outside of the finance industry the last...
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Listed by CFO Tech as one of the Top 10 Accounts Payable Solution Providers 2018 and 2019 and by CIO Review as part of the 20 Most Promising Corporate Finance Tech companies for 2017, OnPay Solutions streamlines processes for accounts payable by automating invoice processing and payments.