For A/P, when it comes to making the jump to electronic payments, the question has shifted from “Why should we?” to “Why shouldn’t we?”
According to Global Payments: Maximizing Cash Flow with Electronic Payments and Process Automation — a recent report by the Aberdeen Group — Accounts Payable can reduce the cost of making payments up to 45% by moving away from paper.
Specifically, the report highlighted the average cost associated with the following payment methods:
- producing a paper check ($7.15)
- an Automated Clearing House (ACH) payment ($4.72), and
- a corporate credit card payment ($3.96).
When it comes to moving to e-payments, one of the biggest challenges for A/P departments is getting their vendors to buy-in. But an increasing number are firms are putting pressure on hesistant vendors.
In fact, 61% of the companies in the Aberdeen report are more likely to require key vendors to accept electronic payments as a condition of doing business.
Another key finding from the Aberdeen Group: The use of paper checks declined at over half of the U.S. companies in the report.
Readers, has your A/P department made the switch to electronic payments? Let us know how it went in the Comments Section.