By Pete Rizzo (@pete_rizzo_)
In payments, capitalizing on trends is not only key for growth, it’s essential for companies that want to compete. Just ask any entrepreneur, and you’ll find out how fast the market moves.
Yet despite this need, many businesses continue more costly practices for fear that streamlined solutions may disrupt operations, even temporarily. Such is the case with paper checks, which research and uses cases have proven to be more expensive and less efficient than digital alternatives.
To help you better understand the benefits of electronic accounts payable (EAP) solutions and the drawbacks of paper checks, here are our top five reasons you should make the switch.
1. Electronic invoicing and presentment saved the government 70 percent each time it processed an item, reducing overall payment system costs by $1.16 billion in 2010.
2. By transforming paper checks into electronic payments, a global five-star hotel chain was able to obtain annual savings of $771,987 and a projected five-year return of $3.86 million.
3. Seventy-one percent of buyers within the accounts payables and accounts receivables ecosystem have said that virtual card products have reduced their organization’s accounts payable cost.
4. In 2011, organizations were more likely to experience check fraud – 85 percent – than ACH – 28 percent – and wire fraud – 5 percent – according to the Association for Financial Professionals.
5. The U.S. Treasury Department has found that it costs 92 cents more to issue a paper check than it does to issue a direct-deposit check, and analysts firms say the cost of processing paper checks is $7.15, compared to $4.72 for an automated clearing house (ACH) payment and $3.96 for a commercial card payment.
For more on why your company should ditch paper checks once and for all, and how you can prepare for the transition, read “From Paper Checks To Electronic Payments: Eight Questions To Ask” by PYMNTS contributor and vice president of purchasing product provider CSI Enterprises David Disque here.