The high-tech future’s finally arriving in finance departments all across the country, and e-payments are slated to take over.
Check payments now account for less than half (42%) of all business-to-business transactions, according to the 2019 AFP Electronic Payments Survey report. This is the first time checks have fallen below the 50% mark.
As the report explains, companies are now more open to shifting to electronic alternatives. There’s a wide array of new tech and payment methods available that are “more compelling than checks.”
With the door of opportunity open, it’s time to further consider and develop your company’s e-payments strategy.
Headed in the right direction
This new report indicates that checks won’t reign supreme forever. But that doesn’t mean getting rid of them and increasing e-payments will be a cake walk for your finance team.
Even though checks are slower and less secure, they still account for a big portion of payments, AFP notes. You may face challenges in your transition to e-payments, like:
- making internal process changes
- securing IT resources, and
- convincing other business partners to get on board.
The report also notes that while about a third (37%) of companies want to stay current with technology and implement early adoption, others are taking a wait-and-see approach.
With check usage on the decline but still asserting a strong presence in offices nationwide, it’s clear that there’s more work to be done. To decrease your company’s check usage and boost vendor adoption of e-payments, share these strategies with your finance team:
1. Offer concrete numbers. Saying “it’s cheaper” or “it’s quicker” may not be enough to sway vendors. But with a few quick calculations, your team can give vendors a rough estimate of how much quicker they could get their money by switching from checks to, say, ACH.
2. Connect your vendors. Is there an important vendor that’s hesitant to devote the time or energy to make the switch? Have your team share a success story, perhaps about another vendor who was skeptical but then came around. They could even ask that once-skeptical vendor if they’d be willing to talk to other vendors or share advice on converting to e-payments.
3. Play hardball. Sometimes, a more aggressive approach is what finally gets stubborn vendors to buy in. As CFO, you should help decide exactly how resolute your team will be. For example, they could use more subtle language, like, “We’re moving away from paper checks,” or take an unwavering stance with a statement like, “We’re no longer issuing paper checks.” And it really works: A/P pros who eventually decided to just draw the line with vendors that used old-school payment methods have said the vendors acquiesced.
And staying on it
Another key point: Some vendors may not currently have the technology they need to accept e-payments. But as you know, technology offerings – and companies’ priorities – are changing every day. A vendor that wasn’t equipped to receive e-payments five months ago may have more capabilities now.
Of course, vendors’ first thought probably won’t be, “I should reach out and let our customers know!” That’s why your finance team should be mindful to keep checking in with vendors, especially those you work with regularly, to see if there’s been progress in their digital journeys.