It’s no surprise that speed plays a key role in payment processing. However, increased speed may result in lower accuracy. B2B transactions should be based on precise payment processing, sourcing and invoicing. Otherwise, the company’s bottom line may be brought into question.
Though the modern world of payment processing boasts various technological innovations, checks are still popular: paper checks are being issued by more than 74% of companies. This can be rather costly for companies. According to the 2015 AFP Payments Cost Benchmarking Survey, the total transaction costs for checks may account for $1 million annually for an organization that processes more than 20.000 checks on a monthly basis.
Flexibility of Payment Processing
According to the 2016 Electronic Payments Survey, paper checks are the main payment method for 51% of survey participants. 49% of people who participated in the survey said they used other forms of payment.
Though one payment method could hardly replace all the other payment forms, buyers should be flexible to their vendor’s needs. B2B payment options should be based on a holistic approach and serve both virtual cards, ACH and checks so to meet the needs of a variety of suppliers.
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Payment processing transparency is crucial to the success and security of your business. Increased visibility applied to supplier payments will provide bases for developing a detailed cash management strategy.
If payment technologies are able to enhance corporate cash management thanks to visibility applied into their cash positions, executives can be financed beyond individual transactions alone.
Automation is vital for both data visibility, speed, and accuracy. Payment processes completed manually and multiple human touches per invoice decrease the speed of transaction approval. This gets multiplied by the number of transactions departments complete on a monthly basis. As a result, you get a slowdown reflected in the earnings received at the end of the year, executive’s ability to keep cash flow under control, decreased discount capture, and adversely impacted relationships with suppliers.
When an organization automates the full cycle of transactions, this results in increased visibility and reduced costs. To successfully adopt a holistic, automated payment process, you should introduce an open, scalable and flexible system, accommodating the available data and integrating what is new.