The Credit Research Foundation in partnership with NACHA released a survey with a bold prediction. Accounts receivable professionals anticipate that as early as 2020, ACH transactions will be the leading form of payments received from business customers.
While check payments still account for nearly 50 percent of B2B payments, that trend is expected to change—and fast. The reasons for the expected rise in ACH are faster payments, greater security in payments processing, and customer demand. Customers are the primary force moving the needle on electronic payment options, which means that if they're advocating for the change, the change is here to stay.
Satisfied suppliers lead to better business relationships...and oftentimes better pricing. - Nvoicepay
Senior Director of Corporate Relations and Product Management of NACHA Rob Unger says, "The big growth in ACH payments anticipated by credit and receivables professionals in just three years is truly significant. It demonstrates the growing importance of ACH payments to support the evolving needs and goals of businesses."
Business needs are changing and with them is an expectation from suppliers that ePayment options are in place. The consumer world of payments has toed the line for faster payments for some time, and we're starting to see that translate into the B2B space. This means checks are no longer a viable strategy for the future of businesses.
Why it's better to aim for full and not partial automation
As a business, it might be tempting to cobble together an electronic payments solution out of your bank's card program options. This is a common mistake that companies make when first transitioning to electronic payments. Getting a fully automated payments process is the best way to go about electronic payments, and here's why.
Many partial automation solutions, like bank card programs or cloud-based payment services, don't enroll 100 percent of your suppliers for electronic payments, which means they're making promises they can't keep.
Often, rebate earnings for card programs are contingent on meeting a certain threshold that's almost impossible to achieve without round-the-clock supplier enrollment, which again, a bank or card solution won't do. Without consistent supplier enrollment for electronic payments, payment automation isn't really automation at all.
With a fully automated payment solution, 100 percent of new and existing suppliers are enrolled, rebates accumulate immediately, and payment types are consolidated into a single, easy-to-use workflow. If you're even considering an electronic payments solution, this is why it's better to jump in with both feet with a full-service solution. Just dipping your toe into automation is a harder route in the long run, as the disjointed processes must be assembled piecemeal to blend with existing technology. Starting from square one is a much better approach.
Your suppliers deserve secure financial data
Chances are you have one employee dedicated to managing the master supplier file. If not, it's a shared responsibility amongst employees and is not given highest priority. By letting a payment automation provider take care of supplier payment data management, you're relieving your staff of this workload and enabling more suppliers to receive electronic forms of payment.
You're also helping to better secure the financial data within your organization by handing it over to a secure third-party. This helps many companies stay compliant as well as warding off the threat of fraud.
Along the same vein, checks are notorious for leaving the door open to fraud in organizations. This is why payment automation is paramount to help secure your organization's financial data. According to the 2017 AFP Payments Fraud survey, 75 percent of companies said they experienced check fraud the previous year. Dealing with the risk of fraud is reason enough to eliminate or reduce checks from AP payments.
Help your suppliers make the switch
A full-time payment automation provider will help your customers make the switch to ePayments successfully. While it is no secret that most customers want this option, many aren't given the option because AP department have limited time for supplier enrollment into electronic payments. Allow your customers the payment options they want and allow your AP staff members to engage in more strategic activities by offloading the burden of supplier data management and payments. Stay in front of the wave of ePayments that's on the horizon for businesses. The more automated the back office, the more quickly a company can react to ever-changing business needs.
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