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Payments really can change everything!  

Download our eBook to learn how payments can affect every part of your business from supplier relations to impacting your bottom line. 

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This eBook covers the four significant ways payments impact and improve your business!


Download now to find tips and guidelines on how payments and payment automation can change your business for the better.

Introduction

Dear CFO or Controller,

We all know that payment automation has been solved in the consumer world, from online payments using paperless billing transactions to mobile payment processes. Further, technologies have fundamentally changed industries like travel, retail, ride sharing. Here at OnPay Solutions, we think it’s time technology solved this, too.

Business-to-business payment automation technology has opened doors to tremendous opportunities for companies through Accounts Payable automation, system integration, and vendor enrollment and payment remittances delivery; as fewer and few companies prefer paper checks, more businesses are seeing the benefits of payment automation.

Are you using the best payment platform to issue payments to maximize the return to your company?

Electronic Payments (ePayments) offer many advantages that are not available when using paper checks. With time-savings, controlled expenses, a more user-friendly platform, and a reduced risk of payment fraud, electronic payments add flexibility and a peace of mind while optimizing your working capital.

This significant efficiency boost over paper checks also allows for fewer steps and fewer opportunities for mistakes by Accounts Payable staff.

Unlike the lengthy check-printing process, an electronic payment only takes seconds to complete, improving efficiencies and reducing your security risk. Worries of paper check loss and theft will become a thing of the past.

Transitioning from paper checks to convenient electronic payments also frees your Accounts Payable staff of valuable time that would be spent monitoring checks. Adopting ePayments will allow your managers to focus on all aspects of Accounts Payable that improves your company’s profitability .

With our user-friendly payment hub, you are able to use virtually any accounting or ERP system to securely automate all of your payments.

Using our trusted OnPayConnect ePayment Automation Platform, your vendors will always be informed of your payment processing activity.

This will cause an enhanced form of vendor communication.

With more than 25 years of experience with payments and vendor

relations under my belt, I make it this company’s mission to change the way buyers and suppliers pay and account for their goods and services. Making an impact on payment processes and promoting automation is important to us because positive supplier relationships can lead to better pricing, better payment terms, and higher quality service. In addition payments can impact you’re your accounts payable department’s productivity, and even your company’s monthly revenue.

Our customers rely on OnPay Solutions for electronic payments because payment technology is all we do. With better payment terms and higher quality payables, the transition to electronic payments has never been easier.

Best Regards,

Neal Anderson

CHAPTER ONE

Vendor Relations

From an improved level of productivity to lower costs, there are many positive outcomes of maintaining good vendor/supplier relationships. It may come as a surprise that the efficiency of your accounts payable processes can play a part in strengthening supplier relationships. These professional relationships can positively or negatively affect the quality of your company's product, which play roles in your customer satisfaction, giving you a “leg-up” against competition.

Better payment terms and higher quality payables services can help. Streamlining the processing of electronic invoices for approval and then scheduling payments will reduce the number of phone calls into Accounts Payable regarding payment status. With a plethora of opportunities that can impact the bottom line and with service levels at stake, it is crucial to nurture these professional relationships.

Speedy and reliable tools for automating payments don’t overly burden your team or your IT staff. Once the plans for migration to ePayments is in place, during procurement, advise suppliers that only electronic payments will be issued with two primary options of Virtual Credit and ACH (electronic funds transfer). Direct your suppliers to use an online vendor portal for on-boarding and for delivering online remittance. Doing so makes communication easier for you and for them.

Utilizing technology you may set up systems that allow the suppliers to see their invoice's location within your accounts payable approval process or simply notify them when the invoice is approved to be paid. By making electronic payments, your vendor will always know when a payment has been processed and you will become a preferred customer with an excellent payment processing history. Whether you are settling the payment today with a Virtual Card or 5 days from now via ACH, the supplier can always count on your team to notify them in advance.

CHAPTER TWO

employee relations - group of business people shaking hands

Employee Relations

Payments can significantly impact employee relations and 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?

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.

Accounts Payable Managers play the role of an experienced supervisor, which makes them 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.

We will begin our analysis of the check-making 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. Postage is then applied, the checks are mailed, and finally, the Accounts Payable check register report is printed. Automated payment technology reduces the time spent issuing checks from 6 man hours of two staffers, to only 20 minutes.

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. When issuing 500 checks on average, roughly three hours per person is dedicated to issuing checks at a typical company every week, 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. 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.

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.

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, aMICnd eMICR toner ink cartridges, is required.

Freeing the staff from printing as many checks can allow them to refocus on the business of accounting and not tracking and managing physical inventory. 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. 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.

CHAPTER THREE

Fraud Risk

There are various forms of risks when making business-to-business payments. There is check fraud, unauthorized ACH debits, employee fraud, credit card fraud and email scams that create different financial and operational implications for companies to overcome.

While smaller companies must be the most concerned about online bank fraud, caused by unsecured computers or servers being accessed by cyber-criminals, in accounts payable with mid-sized and large businesses today, we find that check fraud remains the greatest risk businesses face in making payments.

Why are companies still issuing checks? Well, simply stated checks are the easiest way to make a payment. A company simply needs a vendor name and mailing address to pay a vendor by check. That makes them more convenient. Concerns about security may also hinder some companies from issuing electronic payments.

Moreover, with the news of company employees being tricked by email scams into wiring funds to fraudsters at the request or demand of C-Suite executive, electronic payments may not seem a great option either. Physical credit cards are also at risk of fraud when the physical credit card number, 3-digit CVC, and expiration date of the card are provided to vendors for payments.

In Accounts Payable processing, there are safety features on bank accounts or internal processes that companies must use to issue financial transactions and to help prevent fraud. Safety measures like issuing virtual card payments — made with a unique number to a specific payee for a specific dollar amount — and internal controls such as separation of duties for keying then making payments along with an ironclad audit trail all play a part.

Virtual Cards (V-Cards) — single-issue credit card numbers are the safest payment methods for businesses to use to pay vendors.

These V-Cards are tied to a specific vendor and invoice or set of invoices and dollar amounts. V-Card numbers are generated and once processed, they cannot be used again. The card number immediately becomes invalid; providing your business account an extra level of security protection.

Automated Clearing House (ACH payment processing) requires the collection of a vendor’s bank account number and routing number, adding an extra layer of protection. No replications that can be made from using checks in these bank to bank transactions and there is a 48 hour time gap to cancel the payment.

A full electronic audit trail gives a step by step documented history of the transaction. Moreover, with ACH Debit Block, you specify which companies are authorized to post debits to your accounts white automatically blocking those that are not. This system protects your business from unauthorized transactions.

Payment security begins with Accounts Payable Departments following standardized processes that require separation of duties for issuing payments. At the minimum, we recommend that the person who keys in a payment (paper or ePayment) not issue the payment. Another employee should issue. We expect that any system or tool used to issue ACH payments maintain all vendor bank account data in an encrypted file, neither accessible nor editable by anyone internally without the highest level of security clearance; although high-end ERP systems issue electronic payments, many do not specialize in payment processing and their applications do not contain this added protection against an internal fraud.

Prevent email hoaxes that cause Wire Fraud by requiring that your team uses a two-step or two-factor authentication for emails.

Establish other communication channels — such as telephone calls — to verify significant transactions to help mitigate the possibility of losses. With the right precautions in place such as using trusted payment automation technology, you will prevent unauthorized ACH debit transactions, and avoid both employee and paper check fraud. The audit trail in your payment technology can and should be able to provide insight if any suspicious activity occurs.

CHAPTER FOUR

Bottom Line

Payments and the way they are made can have a big impact on the business environment. By moving your business from paper check printing to electronic payments, you will experience many benefits including freed employee time, much lower costs per transaction, and there's even an opportunity for monthly cash rebates — creating a new revenue stream for your company.

Electronic forms of payment are fortunately gaining ground. 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 on- boarding program, using a strategic vendor enrollment program, will ensure that a company's results meets or exceeds this conservative estimate.

 

Eliminate paper checks. Checks, on average, cost 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 results 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.

Reductions in labor hours of issuing payments create reductions in the supplies and materials and cash flow increments, causing electronic payments to substantially impact your bottom line. By eliminating manual processes of outdated payment processing methods, which put a strain on the efficiency of an organization, you can create a significant improvement to your bottom line.

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 them monthly cash rebates that can create a new revenue stream of approximately 1% of a company's Accounts Payable that was spent on virtual cards. This 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 monthly cash rebate program, a virtual card rebates system is a win-win situation.

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 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.

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.


 

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