Control Cash Flow

Living With Checks

How to deal with paper payments efficiently

Living With Checks
 

Checks aren’t disappearing anytime soon. 

The Federal Reserve sees a steady shift away from checks of 6 percent annually.  However, for a typical business with 60 percent of payments sent via paper check today1, a 6 percent annual drop in check volume means the business will still be remitting 34 percent of its payments by check ten years from now. Checks could remain for quite a while even as business owners say they would prefer electronic payment methods like ACH (Automated Clearing House), wire transfer and card1.

Dealing with paper efficiently

The continuing presence of checks doesn’t mean that businesses have to endure the high invoice processing costs, heightened fraud risk, and increased reconciliation/research costs that come with paper payments. There are some ways to mitigate the challenges paper payments present while managing cash more efficiently.

Actively shift to more electronic payments - The obvious answer to manage paper payments is to move as many payments as possible to an electronic environment.  ACH, wire transfer, and credit and debit card payments all reduce costs and improve reconciliation processing efficiency.  SunTrust Research finds that business owners want faster processing the most, but also value reliable payments and secure transactions when considering electronic payment processing1.

 

Simplify payments - Consolidating the majority of your payments through an online bill pay system allows you to manage all your business cash flow needs, including payables, receivables, expenses and business transactions with real-time access to information. Employee payroll can also be easily incorporated into most online systems. Scheduling, editing and paying bills and payroll, even setting up reminders, makes it easy for your business stay on top of your cash flow and reduce processing fees while cutting down on lost, late or possibly misappropriated payments.

Increase fraud protection -  Checks are still the number one form of payment fraud perpetrated on businesses today2. Taking simple steps like reconciling accounts daily, separating duties, implementing dual approval for payments and dedicating a single computer for all banking/payment activity can go a long way towards minimizing fraud risk.  Outsourcing reconciliation processes is another option, which also benefits your Accounts Payable staff by reducing their workload, allowing time for other more profitable activities.  In fact, 88% of businesses surveyed by the AFP (Association of Financial Professionals) use a Positive Pay service to guard against check fraud2

Keep paper offsite - Gain faster access to funds with outsourced lockboxes that eliminate processing high volume checks manually in-house.  You can save storage fees and staff workload by warehousing those cancelled paper checks offsite, taking advantage of image retrieval services to provide more easily retrievable archives supporting payment reconciliation and servicing.

Don’t let paper payments crimp your business.  Ask your Treasury Sales Officer or Relationship Manager to start a payments review and find ways to process your checks more efficiently and securely.

1 SunTrust Research Q4 2015

2 Association for Financial Professionals (AFP); 2016 Payments Fraud and Control Survey

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