A long-overdue revolution is occurring in the way that businesses pay their suppliers.
Approximately three-quarters of businesses are increasing the percentage of payments to suppliers that they make electronically, the Association for Financial Professionals (AFP) reports.
Businesses with at least $1 billion in annual revenues are leading the charge towards electronic business-to-business payments, but AFP’s research shows a clear trend across all business segments:
Paper checks are finally losing their grip on the way that businesses pay for goods and services.
Automated Clearing House (ACH) payments and virtual card transactions (plastic-less, one-time use card transactions) are the beneficiaries. In fact, 93 percent of businesses can pay suppliers via ACH.
Efficiency is the driver towards electronic payments
What’s motivating businesses to ditch paper checks?
An eye-popping 88 percent of finance professionals surveyed by AFP point to increased efficiency as their primary reason for transitioning to electronic payments from paper checks. Manually printing, stuffing, mailing and reconciling check payments to suppliers is a tremendous burden to businesses.
Eighty-two percent of finance professionals are migrating to electronic payments to reduce costs. More than one-third of finance professionals want cost savings of 10 percent to move to electronic payments. Thirty-two percent of financial professionals are looking for even greater cost savings. Among privately held businesses, 37 percent would switch from paper checks to electronic payments for cost savings of least 10 percent, AFP finds. These cost savings are within reach for businesses.
It can cost businesses 30 times as much to pay suppliers with a check compared to an electronic payment mechanism such as ACH, the National Automated Clearing House Association (NACHA) reports. Moreover, paper checks are responsible more than 10 times as many incidents of fraud – a hidden cost of paying suppliers with antiquated paper checks, per NACHA’s benchmarking data.
Eliminate Paying Venders with Paper Check
ACOM Solutions can help your business declare its independence from paper checks.
We provide an end-to-end electronic payments solution that makes it easy and secure to pay suppliers electronically, as well as a full suite of supplier onboarding services that ensure optimum adoption.