Taking an informed stance on automated systems regarding invoicing and electronic payments will be essential in 2018. As more companies utilize mobile devices to make payments, institute automated accounts payable systems, and enter into e-commerce, the need for robust electronic payments solutions and techniques is essential. The following are a few tips that your business can benefit from in regards to electronic payments.
Offer A Variety of Payment Options
Serve your suppliers and vendors better by offering a wider variety of payment options in 2018. Options concerning payments can mean the difference between losing or maintaining key relationships with your best suppliers, along with their preferred pricing and terms. Electronic payment options are certainly gaining traction in recent years, including credit card, virtual card, wire transfer or ACH transfers.
Setting a Credit Policy
2018 should be the year you develop a credit system. Of course, you will want to implement a credit check system that is thorough to ensure your clients are creditworthy beforehand. Offering credit gives your company a sense of legitimacy and stability, and is made easier with new technology, but make an effort to mitigate the risk especially when it comes to electronic payments.
Shorter Payment Terms
Cutting down on your payments terms is a trend that goes hand-in-hand with the increased adoption of electronic payment methods. The days of Net 90 terms are long gone, and most suppliers are looking for a Net 30 payment term on invoices. One critical opportunity here as you consider shortening your payment terms, is to negotiate a discount on your payment for shortening the payment terms. By offering “early pay” discounts, or Dynamic Discounting, the suppliers can receive their payment quicker in exchange for a discounted payment. This creates a win-win scenario for you and your suppliers.
Create a Single Port of Entry for Invoices
Streamline your AP process by limiting how your invoices are received and delivered. Many companies spent countless hours manually processing paper invoices from their suppliers. Creating an invoice only email address is a good start in digitizing the invoicing process, but moving to a fully electronic invoice capture method by providing a vendor portal for suppliers to upload invoices will dramatically improve your Accounts Payable workflow.
Improve Your Invoice Processing
With cloud-based automated accounts payable systems, creating approval workflows and streamlining the entire procure-to-pay process will free up staff to focus on other critical areas of the business, including analyzing cash flow and other key financial data. Additionally, this functionality enables you to monitor invoices and payments, and all critical data from anywhere in the world where Internet access is available.
Keeping Supplier Agreements Updated
Make sure to continuously take a look at your supply agreements and scrutinize them for any inconsistencies, or changes in your professional relationships. This will make your accounts payable system much stronger and accurate ensuring there are no hidden costs or missed economic opportunities. For example, you may find a past payment agreement based on issuing paper checks, and now that you are working with electronic payments such an agreement may not be advantageous to you any longer and should be terminated or altered.
Make a Concerted Effort to go Paperless
It’s evident that electronic payments reduce the use of paper. However, the benefits of cutting down on paper can reach multiple aspects of your business. Going paperless can save you money and time as processing paper documents can be a costly endeavor. You will not have to devote resources to organize and handle hard paper documents. Additionally, it will increase chances of accurately catching double payments or issues with your accounts payable process.
