The world has changed a lot over the last 20 years. In 1998 cellphones were the size of bricks and analysts were making (considered at the time to be crazy) predictions that theinternet would one day be accessible from a mobile device. Fast forward to the year 2019 and not only is the internet accessible from a mobile device, nowadays we spend our lives constantly connected to the internet and to each other. We go to sleep scrolling through news feeds and checking email, only to wake up and start the cycle over again. Easy access to the information combined with the speed of communication and data transfer have made the internet an integral part of our personal and professional lives. One of the fastest growing arenas of this new era is Finance. Technological advancements and new software solutions have vastly improved the efficiency of any Accounts Payable department.
According to a recent study only 42% of organizations are using paper checks for payments. That's down by almost 50% from 2004. With the incredible accounts payable software solutions available today and the positive impact these solutions can have on any ap department, experts predict that the number of companies migrating away from paper checks will increase exponentially over the next few years.
Payments and the way they are made have always had a big impact on the business environment. Starting with a reduction in the labor hours it takes to issue payments, to the amount saved on supplies and materials, to an increased certainty of cash flow; payments processed electronically offer a substantial impact to your bottom line. Eliminating the manual nature of outdated payment processing methods, which put a strain on the efficiency of an organization, creates a significant improvement to the bottom line.
By moving your business away from paper check printing to electronic payments, you will experience many benefits including: freed employee time and much lower costs per transaction. There's even an opportunity for monthly cash rebates through Virtual Cards — creating a new revenue stream for your company.
In summary: you will SAVE costs on labor, paper, printing supplies, and cost per transaction while EARNING cash back through Virtual Cards. Sound to good to be true? It's not. Here's why:
1.) Time Savings
Aside from the time spent to enter invoices and approve them within your accounting system, often, companies require two people to oversee the check printing process to further ensure security. This creates hefty labor expenses and does not guarantee that checks will not be lost in transit. Checks have the likelihood to be lost or stolen. By having the Accounts Payable staff monitor and handle the check printing process, their time is inefficiently being used. Employees are more productive when their tasks are tied closely to their job descriptions. Vendor relationships will also improve and companies will have a lower risk of payment fraud.
2.) Cost Reduction
A check, on average, costs four dollars to generate (postage, check stock, envelopes, printing, and storage costs). This number is then multiplied if the company uses different check stock and supplies,which result in compounding the costs by the number of bank accounts a company uses. In comparison, an ACH payment transaction costs roughly fifty cents per transaction with no need to have payments physically monitored for hours during issuance. Instead companies create a separation of duties and authority of each user within the payment module which accomplishes the internal controls on security required when issuing payments. Some companies send and receive payments in many different formats — credit cards, electronic payments and paper checks. With Credit payments there is usually no cost per transaction. With a comprehensive payment system and more time-efficient electronic payment tools (credit, debit and automatic and/or recurring payments), more seamless payment options will be created, significantly reducing expenses.
3.) Money Earned
Virtual cards have been available for use for several years and what they offer companies in benefits far outweigh the perks of issuing paper checks. Single-issue V-Card numbers are unique in each transaction and tied to a specific vendor for a specific dollar amount. Every dollar a company spends on Virtual Card vendor payments earns themmonthly cash rebates that can create a new revenue stream of approximately 1% of a company's A/P that was spent on virtual cards. That impacts the bottom line, especially when a virtual card partner pays the rebates each month and doesn't hold off for quarterly or annual disbursement. With less paper being used, automatic savings, and a monthly cash rebate program, a virtual card rebates system is a win-win situation.
Typically, a company can conservatively estimate that 25 - 30% of their A/P spend can migrate to virtual cards if they have never issued another form of electronic payment. Optimizing the vendor onboarding program, using a strategic vendor enrollment program, will ensure that a company's results meets or exceeds this conservative estimate.
Electronic forms of payment are clearly gaining ground. "The dire need for payment automation has been solved in the consumer world, from online payments using paperless billing transactions to mobile payment processes," says Neal Anderson, President and Chief Executive Officer at OnPay Solutions. "Travel agents, online retail, taxi cabs at the touch of a button...Technology solved all that."
"Automated ePayment processing for companies? It's time technology solved this, too."
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.