Part Two in the Blog Series: How Payments Impact Your Business
Keeping employee morale high is one of the best things you can do to instill loyalty and maintain a productive workplace.
Have you ever stopped to think about how payments can impact employee relations in the Accounts Payable department of an organization? Payments can significantly impact employee relations!
Streamlining your payments to electronic payments changes the traditional payment process allowing employees to spend less time on the physical act of printing, folding and mailing -- all administrative tasks -- and more time on their actual financial roles in the company. The result may allow them to feel more productive and empowered.
An experienced Accounts Payable Manager plays the role of a supervisor, which makes you responsible for quickly and adequately processing payments for all invoices that are received, as well as ensuring each member of the team accurately performs their duties. In the best scenario, your team is cooperatively working within the system or standard operating procedures that they feel maximizes their impact while minimizing redundancy and room for error.
As President and CEO of OnPay Solutions, consulting with clients on the day-to-day management of accounts payable processes and payment automation is routine for Neal Anderson. With a solid understanding of everything "payables," from bookkeeping and old-fashioned paper check processing, to fully-integrated invoice and payment automation, Neal ensures that the Accounts Payable Departments and their teams are working as productively as possible.
1) Limiting Processing Times
When considering check processing, from the financial reporting side to the actual printing and mailing, there are as many as ten steps that are required to issue checks. We will start our analysis of the process at the point when the, invoices have been approved for payment. Check stock is loaded into a laser printer to be printed. Printing begins. Checks are removed from the printer. Required high-dollar checks for hand-signatures may need to be pulled and then the checks must be hand signed. Next they are folded and inserted into envelopes. Then postage applied. Then finally mailed. Finally, the Accounts Payable check register report is printed.
That was 10 steps. Some companies add additional steps of reprinting checks and attaching to invoices for validation and so forth. Imagine how many more steps that can be.
“When issuing 500 checks on average, roughly three hours per person is dedicated to issuing checks at a typical company every week,” says Neal. "And, typically, a minimum of two personnel but more likely four staffers are involved in this process."
"Payments can more easily be distributed electronically, with the same separation of duties; one enters, another approves and another releases and so on. By migrating to electronic payments, each of the parties can reduce their time to about 10 minutes."
In the scenario above, that reduces the time spent issuing checks from 6 man hours of two staffers, to only 20 minutes.
2) Focusing on Accounting Roles
The change from checks to ePayments frees employees from the administrative paper-pushing side of check printing and gives them the ability to focus on the actual financial roles of their job descriptions. If less time is spent in the manual-process roles, employee morale will elevate with a higher feeling of contribution, better use of accounting skills and more time for analysis and reporting.
If a concern for validation of payments is required, electronic copies of email remittance receipts that are sent to the vendors can be sent back to a member of the team. All reports provide detailed documentation of all payees, invoice numbers, dollar amounts and complete transparency of all settlement of the invoices would be available as your audit trail.
3) Getting out of Inventory Business
Aside from the time spent issuing paper checks and labor hours spent issuing paper checks, there are other physical resources that must be inventoried and safe-guarded to ensure security and protect against check fraud. Typically check stock (even when blank) is kept under lock and key in the accounting department. And inventory of specialty envelopes, postage, and MICR toner ink cartridges, is required.
Freeing the staff from printing as many checks, can allow them to again focus on the business of accounting and not tracking and managing physical inventory.
Overall, the migration away from paper checks may likely lead to higher employee morale, which, then results in better overall performance, service orientation, a higher degree of accuracy, and finer attention to detail. Fewer errors will be made, meaning less back-tracking and rechecking, keeping employees productively moving along with their business.
Employees that are more productive feel as if they are meaningfully impacting a company, have a high job satisfaction rating and become more loyal to the company.
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.