Digitize Accounts Payable Payments...Join The Movement!
It’s 2022, most of us don’t write checks anymore and if we do, it’s a rare occasion.
Then why is your accounts payable department still issuing check payments to vendors?
If you are issuing checks, you are missing out on a tremendous opportunity that many businesses have realized and capitalized upon. Businesses just like yours. By digitizing accounts payable payments, companies not only save tremendous cost, they have reduced their fraud-risk and they may also be reaping benefits of cash-back rebates paid monthly.
By updating your accounts payable process to a digitized system, your company will save an average of $3.50 to $5.00 per check, which is an amount that most companies agree it costs them to get a check out the door. If AP is issuing 500 checks each week, you’re spending between $1,750 and $2,500 a week on the process. Annually that adds up to $91,000 - $130,000 in expenses.
By digitizing your accounts payable payments you can save more than you spend because effective electronic payment programs will convert 80% of your payments to digital payments. Using the same scenario, saving somewhere between $72,000 and $104,000 each year.
Furthermore, your team gains efficiency. Gone are the days of ordering supplies, printing, folding and stuffing checks into mail. Here come the days of digital transactions and online reporting and reconciliation to make settling payments a breeze.
The most enticing digital AP programs include virtual credit card payments which allow you to employ a secure credit card for your invoice payments – yet keep those payments running through your controlled and managed AP processes. The cards are issued on a one-to-one basis for each vendor and an approved dollar amount. It’s amazing, without providing a card over the phone or an open line of credit to a vendor, you can earn approximately 1.25 or 125 basis points in rebates paid each and every month. THAT turns your accounts payable cost center into a profit center.
While many accounts payable departments make use of purchasing cards, those programs are limited and restricted and don’t touch the majority of the spend in a company. A $200 million dollar company most likely averages $60 Million in annual Accounts Payable spend. By deploying a virtual card program for accounts payable and migrating only 30% of the spend into a card program, a company can potentially earn $120,000 per year in rebates.
Overall, the net impact of migrating to digitized payments on this sized business can be in the $200,000 range each year. That's real money!
It's time to digitize payments and it's time for you to join the movement!
Originally posted July 2018. Updated for quality and accuracy October 5th, 2022.
