Businesses today have a number of digital tools available to help ensure accurate and well-timed payments among vendors and customers. These five tips can help businesses effectively manage payments:
1. Collect payments from customers at the time of sale or service. Provide the option of mobile merchant services for your customers. Not only will this be more convenient, it can also help you secure faster payment and funding. When you deliver your goods or services, have an invoice ready for your customers. You may be slowing down your cash flow if you delay invoicing.
2. Offer your customers electronic billing. If billing is on time, payment is more likely to follow suit, which gives you more control over your cash intake. Try providing easy online payment options for one-time and returning customers such as credit cards, debit cards or ACH for echecks. Also, consider adding a payment form on your website.
3. Make your own payments to vendors electronically. Remote check deposit is an easy way to scan checks and fund your account without having to go to the bank. Alternatively, you can mail checks directly to the bank’s lockbox and have them processed to your account while you receive a remittance advance. Be sure to automate payments for bills you owe. You’ll have more control over the timing of payments and any discounts you’ve received from vendors. Plus, you can reduce processing costs and administrative expenses.
4. Have employees use company cards for business expenses. With business credit cards, charge cards, or purchasing cards, you can set limits on certain spending categories, which can help employees comply with spending policies, lower fraud risk and easily compile spending data for analysis and reporting. Company cards can also be a useful tool for reducing the cost of transactions, increasing the efficiency of your procure-to-pay process and more.
5. Identify more ways to automate your cycles. Investing in electronic procurement systems can shorten the time it takes to process purchase orders, leading to more efficient workflows. Converting paper checks to electronic payments with online remittance advice or commercial card solutions, for example, can lower your costs and give you more control over your working capital and liquidity.