The COVID-19 pandemic has forced many organizations to reevaluate their approach to accounts payable (AP), especially when it comes to physical check payments vs. electronic payments.
According to a recent McKinsey report, “the rate of growth in electronic payments transactions [in North America] has been nearly twice the GDP growth rate, propelled by the e- and m-commerce boom— as well as the continued shift away from cash and checks.”
Electronic payments allow AP processes to continue at a normal pace while teams are unable to collaborate in person. With many workplaces pivoting to remote work, organizations have discovered the easiest way to offer electronic payments is by implementing an AP automation solution like Paypool. Vendors can conveniently receive electronic payments without being in the office, and firms can transmit and pay invoices electronically through an AP automated solution. So what exactly are the advantages of electronic payments over traditional paper check payments?
Electronic Payments Streamline Time-Consuming Tasks
Electronic payments deliver direct value when it comes to saving time and labor. Traditional paper checks carry invisible expenses that inflate costs, including time spent manually entering data, verifying the accuracy of information, printing and signing checks, and stuffing envelopes.
AP automation makes it much easier to shift from paper checks to electronic payments because Paypool automates the payment process, initiates transactions, and sends vendors remittance information. Additionally, once integrated with your accounting system, all payment processes become more efficient as they share data. Paypool’s cloud-based solution seamlessly integrates with hundreds of systems including NetSuite, QuickBooks, Intacct, and Acumatica.
Prioritizing Electronic Payments Beefs Up Security
An Association of Financial Professionals survey on fraud states that “checks continue to be the payment method most frequently targeted by those committing or attempting to commit fraud.”
By limiting paper-based, manual processes your team can mitigate a huge amount of risk. An automated solution with built-in payment controls can provide secure, automated processes along with encrypted and verified electronic payment options. Unlike paper checks, electronic payments are routed digitally giving approvers complete visibility into every transaction.
Paypool has controls built into every part of the electronic payment process so you can customize your approach. For example, invoices above a certain amount can trigger special approval routes or require dual signatures on payments. Additionally, Paypool’s AP automation allows you to send payment directly to the vendor account so there is no opportunity to route checks elsewhere and risk is minimized.
Electronic Payments Maximize Visibility
In a paper-based system, every step of AP is handled manually. This often results in delays and missed payments as team members struggle to keep up with incoming invoices. If an approver or check signer is unreachable or away from their desk, the entire system can grind to a halt. In an automated cloud-based system, approvers and payment authorizers can manage AP from home, or anywhere with secure internet access.
Within an automated solution, electronic payments are faster and more flexible than traditional payments. Your organization can ensure payments are made on time, solidifying positive relationships with vendors. This promptness in transactions means you’ll have better control over your cash flow.
Storing and Accessing Documentation
Storing paper records can get pretty expensive (not to mention it increases your environmental footprint). If you are storing records on-site, then you better have a fantastic filing system. But most organizations find that digging through past records is a nightmare. Wouldn’t it be easier to find information using a search engine built into your system? That’s possible with automation.
An automated solution will keep a secure and easily searchable digital record of your invoices and payments. And unlike traditional paper-centric accounts payable, automation means that a literal paper trail is no longer necessary. Everything you need is now at your fingertips.
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Organizations need to take immediate action to help AP departments reduce future risk relating to COVID-19. Transitioning to e-invoicing and electronic payments is critical to creating greater flexibility for teams working remotely. The easiest way to embrace electronic payments is through an AP automation solution. With Paypool you just update your vendor records in the automation platform, check the box to pay via electronic instead of by check, and you’re done.
Be prepared—try Paypool, an AP automated solution that makes the transition simple. Learn more with a live or pre-recorded demo.
Brian Acton, Marketing Coordinator at Paypool
Brian has marketing experience at agencies and internal marketing departments. Since 2015, Brian has managed Paypool’s marketing department.