Managing your accounts receivable process is a pivotal aspect of maintaining a healthy financial ecosystem for your business. In the pursuit of effective cash flow management, embracing modern solutions becomes paramount. Traditional methods of managing payments can often be time-consuming, error-prone and costly.
Additionally, they are outdated in this technology-reliant era. Despite paper checks remaining the number one payment method for B2B transactions, their popularity has been declining. A 2018 study showed that they held the number one slot by only 13 percentage points. At 47% of payments, they narrowly defeated ACH payments (at 34%) in that report and in the last five years, the use has continued to drop slightly each year.
What that means is that very soon, paper checks will be extinct. Even in B2B company transactions. Your customers are already accustomed to paying electronically for everything from their grocery delivery to their electricity bill. If your company does not have multiple options available for your customers to pay using their preferred payment method — be it ACH or credit card, one payment at a time or opting for autopay — you are already behind.
Electronic payments offer a streamlined solution that not only enhances your cash flow but improves the overall efficiency of your accounts receivable process. Read on as we delve into six ways that electronic payments can revolutionize your accounts receivable department, allowing you to achieve a new level of financial health.
1. Speed and efficiency
Electronic payments eliminate the need for manual processes such as printing, signing and mailing checks. With just a few clicks, transactions can be initiated, authorized and completed, drastically reducing the time it takes for funds to reach their intended recipients. This improved speed ensures that payments are processed and received in a timely manner, enhancing cash flow predictability.
2. Real-time visibility
One of the greatest advantages of electronic payments is the real-time visibility they offer. You can seamlessly track transactions, monitor account balances and gain insights into cash flow at any time. This visibility enables proactive decision-making, empowering you to modify strategies based on current financial data.
3. Enhanced security
Electronic payment methods incorporate robust encryption and authentication protocols, minimizing the risks associated with paper-based methods. Advanced security measures ensure that sensitive financial information remains protected from potential threats.
4. Reduced costs
Paper-based payments incur costs related to printing, postage, labor and more. Electronic payments significantly cut down these expenses. By shifting to electronic methods, you can cut costs on supplies, postage fees and administrative overhead, contributing to a more efficient and cost-effective process.
5. Improved accuracy
Manual data entry for paper-based payments can lead to costly errors. Electronic payments greatly reduce the likelihood of errors occurring. With pre-populated templates and automated accounts receivable processes, accuracy is improved, minimizing the need for corrective actions and potential delays.
6. Streamlined reconciliation
Reconciling paper-based payments can be a time-consuming task, especially when faced with discrepancies between bank statements and physical checks. Electronic payments simplify the reconciliation process by providing electronic records that are easily matched with bank statements. This streamlined approach reduces the time spent on this process.
How Bectran Can Help
Electronic payments are a modern solution, and they offer a plethora of advantages for businesses of all sizes. But they are only one piece of the order-to-cash cycle. To truly enhance your accounts receivable processes and optimize your efficiency and productivity, electronic payments should be part of a comprehensive financial ecosystem — automatically applied to customer accounts and stored in a central repository. Bectran’s powerful accounts receivable platform provides just that robust, end-to-end framework for streamlining and leveraging automation to transform your AR process into an efficient, accurate machine.
Take your accounts receivable department to the next level with our accounts receivable software and watch your invoice processing times decrease exponentially without worrying about decreases in accuracy.
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