In today's digital world, no one really uses checks regularly for their personal transactions. And now, receiving a paper check seems like something out of the 70's. And the steps to process the check file are also very dated. In business, your advanced ERP may output the file seamlessly, there's just no getting around the folding, stuffing and mailing unless you outsource that to a department with machinery to handle that for you.
Accounts Payable Automation streamlines the Accounts Payable Department resulting in reduced manual processes and improved operational efficiency while reducing the overall cost associated with the department. There are two processes and two transformations that can occur. One is much easier than the other to implement.
Overcoming the monumental barrier of collecting supplier bank instructions is typically close to the top of the list of reasons why companies rationalize continuing to issue check payments.
Who can blame the CFO or CIO for their lack of enthusiasm toward a project that is seems like it could take months or years to manage when their staffs are already stretched thin managing other operational requirements? Relatively speaking, it seems that their decision to stick with checks just seems smarter.
Do you know the advantages of accounts receivable automation? Traditionally, a bank lockbox has been used by company Accounts Receivable departments to increase convenience and efficiency. Lockboxes have been around for decades and much of the traditional bank lockbox's life has been utilized for capturing payment data associated with payments made by check. Commercial banks offered this service to improve efficiency and flow of business transactions simplifying the accounts receivables collection process.
Customers basically leverage the Bank Lockbox to receive check payments in one consistent location.
Many businesses today are leveraging new payment technologies to issue payments within accounts payable to streamline processes, cut costs and reduce risk.
One of the newest forms of electronic payments is vCards, which you will find can make your process inexpensive, fast, convenient, all while providing a higher level of security to your company.
Purchasing cards are prevalent in the B2B payment world because they are convenient and they offer cash-back rebates. They are used by many companies despite there being another, better and more secure option. Because purchasing cards have become somewhat the standard for credit payments, the risks and adverse affects of have been disregarded.
But they shouldn't be.
Virtual cards have been available for use for some time, and the security and rebates they offer far outweigh the perks of using a purchasing card for issuing Accounts Payable payments.
According to the NAPCP, here is the positive aspect of using a purchasing card for PAYERS:
But, MOST of the PROS for P-Cards are on the PAYEE side of the transaction:
As you can see, most of these positives, are for the PAYEE and not the PAYER. In addition, there is the impression that using a purchasing card is as SAFE for PAYERS as the alternative, virtual cards.