Forget Paper Checks If You Want Your Business To Save Some Money
Paper checks are slowly becoming obsolete in the modern world because of the availability of technology such as payment automation software. While many businesses have upgraded and abandoned the use of check payments there are still some who are hesitant to move forward with the change.
The main reason why business owners won’t stop using checks is because they think that this old-school method isn’t hurting their business and profits. Sorry to say so, but the reality of it is, check payments come at a cost. Here are the facts about checks and how much they cost businesses who continue to use them to this day:
The Struggle Of Multiple Payment Types
Anyone who has accounts payable experience knows that managing different types of payments is a major struggle and challenge. While some businesses still use checks, others have moved on to more advanced payment methods which can disrupt the AP department’s workflow.
Each type of payment has its own set of processing steps which can become confusing for a human employee to handle. The confusion and struggle results costing the business time, money, and effort.
The Burden Of The Approval Process
Most company checks require two signatures on the paper because that’s how things have always worked. This means that to get a check approved, a lot of time is wasted on waiting for the right people to sign off. Without their signature, the check is useless and cannot be used for payment.
The approval time is even more difficult when one or both of the authorized people are busy and never in the office. With the use of an automated payment software, they can give their approval for payments in seconds, no matter where they are in the world. It is simply faster, easier, and more efficient than paper checks.
Check Clearing Takes Time
When the people who need to sign the checks aren’t available at a moment’s notice there is a likelihood that all payments will be made past due. As we all know, this comes with a lot of added late fees and possible interest rates. Another cause for delay is the check clearing process. Most banks will require at least a few days before the check can be cleared. During this time the late fees can be mounting and costing the company even more.
It is best to use a payment automation software that credits all payments in real time so that no added fees accumulate because of missed payments.
Risk Of Double Payments
Manually handling payments can cost the company a great deal of money especially when several duplicate payments are made. If one AP staff has already paid a vendor via credit card, but the files don’t include a receipt, another well-meaning employee can send a check for the same invoice; this becomes a major and costly hassle. When the duplicate payments occur, again and again, the company will lose a great deal of money.
Get with the times forget about paper checks. Technology has made accounts payable matters easier, don’t let the opportunity go to waste.
A payment automation software can save business owners from a ton of headaches caused by manual processes. Contact Nexus today to learn more about our business solutions.