Many companies are moving into the 21st century with their payment systems. Paper checks are a relic of the past along with floppy disks and incandescent light bulbs. For those businesses who do still use paper checks, there are certainly some positives. The older systems are more familiar and many employees have been trained for years on them. However, the new system really is more palatable and effective for most businesses. Here are three reasons why companies should ditch checks and use electronic payments.
The first reason is cost savings. Checks cost an inordinate amount of time and money to print out, sign, and process. The average check often costs several dollars to process. With electronic payments, the costs are much smaller. Upfront electronic payment costs, involving the price of software and of training to use that software, may cost several hundreds or thousands of dollars per year. But many companies have thousands or even tens of thousands of checks per year. Paper checks, therefore, are a much more significant burden that continues over time, relative to the one-time costs of setting up software and training employees.
Another reason for switching to electronic payments is improved cash forecasting. This benefits points to the greater ease of electronic payments and the cost savings associated. Electronic payments allow for easier payments from customers. Sometimes, the ease and lower cost associated with electronic payments is so great that the company offers a sizable discount for using this form of payment. Lower prices can help stimulate sales and make customers happier, keeping them in the fold of the company.
The third reason to switch to electronic payments is better payment remittance. Payment remittance refers to the notification process surrounding invoices and letting people know that they have been paid. With paper checks, such a remittance has to be processed individually and in an analog way. It may take several days for the check to be received and checks are occasionally lost in the mail. Therefore, remittances can be difficult and easily lost. Electronic payments are another matter entirely. With electronic payments, remittances are often immediate after the funds are transferred. Immediate remittances can help make office functions run much more smoothly than ever before.
Companies are flocking towards electronic payments and away from paper checks. However, they often need help setting up these systems. WEX Integrated Payables provides one possible avenue for solving the problem. WEX allows companies to fully shift their payment systems over to the electronic realm. This company’s products offer “smart” payments which track remittance information and create detailed database records of all payments. Companies that are considering moving into the 21st century with their payment systems should give WEX a call today.