Today’s practice owners have a variety of options for making payments. They can choose legacy methods like cash, or paper checks sent through the mail, or rely on more modern approaches such as the various forms of electronic payments.
What many practice owners may not realize is that streamlining payment processes can deliver benefits. By eliminating manual tasks such as paper handling and filing, businesses can look to reduce processing costs. In addition, a study from Bottomline Technologies noted that electronically processing accounts payable through ACH and wire transactions reduced fraudulent incidents by 10 times compared to manually processing paper checksi.
Here are some things to consider:
- Processing payments by hand is time consuming, labor intensive, and expensive. The average cost of issuing a check can range from $2 to $10ii.
- Manual processes are prone to human error and susceptible to payment fraud. Seventy-four percent of organizations surveyed reported check fraud in 2019, up from 70% in 2018iii.
- Replacing your paper checks with electronic payments, such as ACH and credit card, your cost per transaction drops and potential for fraud is reduced.
- Converting to an electronic payments system can help your business realize benefits, including a reduction in labor costs associated with paper handling and filing.
- Shorter cycle times can reduce late payment penalties and help capture more available discounts for early payment.
While it may seem like a daunting task to change the way you handle your accounts payable, it may be a positive thing for your practice. And you don’t have to make the transition by yourself. Your Huntington business banker can be a valuable resource to help guide you through the process of becoming a paper-free cash flow manager.
Huntington has in-depth knowledge of the cash flow cycle and practices to help optimize cash on hand. In the face of an uncertain economic climate, now is the time to connect with us. We’ve helped many business owners improve their cash flow management with a thorough cash flow analysis and by offering customized solutions that helped them better manage both payables and receivables.