Managing purchasing day-to-day can be a time-consuming challenge, especially when payments are made in a paper environment. Chasing down payments for suppliers, reconciling checks and keeping an eye on employee spending ties up significant resources needed to run your business. Take control of these time consuming tasks, along with your business's expenses and management of your cash flow, by making the switch to electronic payments.
The Rise of Electronic Payments
According to SunTrust Research, businesses currently send 43 percent of their payments electronically, but would like to send an additional 40 percent electronically versus current payments by paper check or cash.1 There are a number of reasons electronic payments have become more widely adopted and can be valuable to businesses:
- Tune the cash cycle with better scheduling of payments and invoices
- Improve purchasing decision-making with clearer visibility into payment and collections data
- Lower administrative and staffing costs, reduce fraud risk and prevent compliance issues with simplified payment-related processes
- Control employee spending more easily through electronic purchasing and payment cards
- Predict and manage cash levels more precisely with electronic information
Finding the Benefits of Electronic Payments
According to SunTrust Research, over two-thirds of businesses pay their suppliers electronically.1 Why? By adopting electronic payment capabilities, these businesses found an opportunity to gain more control of their on-going and recurring expenses with far less time and paperwork. Making purchases using electronic or payment cards allows small business owners to:
- Take advantage of vendor discounts with faster payments
- Control employee spending with authorizations and limits by spending category and by employee
- Prevent fraud associated with cash, check and expense reports
- Streamline cash flow management by minimizing the hassle of expense reports and receipts
- Earn discounts through rewards programs
Sixty-two percent of businesses currently using electronic payments rank accessibility to online reporting as extremely important to their business. Using online tools typically associated with electronic transactions provides improved expense visibility and allows businesses to:
- Access business transactions online, 24/7 through solutions like SunTrust’s Online Cash Manager and Online Treasury Manager solutions
- Consolidate transactions into a single, secure resource for reviewing purchasing patterns and trends
- Track and control the complete range of business purchases
- More accurately project cash flow needs.
Look for more advice and guidance from SunTrust about setting the best payments strategy and electronifying payments.
Integration and Reporting
Importing electronic information into accounting software through an Online Cash Manager download makes it easy to code and allocate expenses:
- Group expenses and identify opportunities for volume discounts
- Track purchases by employee or project quickly and easily
- Optimize inventory levels without risking shortages
Furthermore, electronic payments can help a business better manage its working capital by providing a level of precision to cash management that is not afforded by paper transactions and checks. Reducing the amount of working capital needed to support each dollar of sales improves capital efficiency and can allow more growth with less capital.
Making the Change
There are a number of ways to shift to electronic purchasing. Some of the more common ways include:
- Look at card programs for some of the most easily implemented electronic methods
- Consider corporate ACH and Electronic Data Interchange (EDI)
- Evaluate direct deposit of payroll
- Implement Enterprise Payment Processing
- Look at same-day payments via wire transfer or Same Day ACH
Electronic payment can help you improve purchasing while unleashing a host of benefits including reduced processing costs, improved cash flow and a reduction in fraud.